What does it mean when your uninsured motorist (UM) coverage is “reduced by?”


Due to the clear distinction between reduced-by and add-on UM coverage and detailed instructions provided to the deceased insured in the UM option form and cover letter, summary judgment was granted to the insurance company was properly granted summary judgment in a dispute over uninsured motorist (UM) coverage, click here.


On June 4, 2017, the decedent was on a motorbike when he performed a left turn in front of a funeral procession, colliding with a truck driven by the defendant. Because of his injuries, the victim tragically lost his life in the mishap. His widow sued the accused party for negligence and wrongful death. They decided the accident was the jury’s fault, and the wife was given $1.6 million. The verdict was only binding against the extent of the defendant’s remaining responsibility and/or underinsured motorist coverage if any.

Alterations to Georgia’s Uniform Marriage Law

In her opinion, Presiding Judge Dillard noted that a brief history of Georgia’s UM statute, OCGA 33-7-11, helped understand the parties’ argument about the amount of UM coverage provided for under the decedent’s Liberty Mutual policy. The Uninsured Motorists Act stipulates, among other things, that “unless the insured declines the coverage in writing,” insurers must “offer UM coverage in motor insurance policies.”

The UM Act was changed in 2008 by the General Assembly, the judge stated that there are now two options for UM protection. It is important to note that before this change, all UM insurance available in Georgia was reduced-by plans, meaning that the UM limits of liability would be lowered by any amount the insured got from the insurer of the tortfeasor. To compensate for losses in excess of the policy limitations of the tortfeasor, an optional form of UM coverage was established in 2008, with the language “the applicable limits of responsibility are available to reimburse any damages an insured suffers.”

In addition, “unless the insured requested [reduced-by] coverage in writing,” the change requires all UM plans to include add-on coverage automatically. The rate for reduced-by coverage is typically less than the premium for excess or [add-on] UM coverage, and many policyholders prefer this option.

Reduction clause in the deceased’s insurance policy

The deceased had purchased a motor insurance policy from Liberty Mutual in 2004, with coverage dates ranging from August 23, 2004, to August 23, 2005. He kept renewing the coverage every year until his death in 2017, thus, it was still active.


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