By David Colmans

Georgia motorists have a new choice to make with their auto insurance. A new law that went into effect Jan. 1 concerns the protection offered by their insurer against underinsured drivers.

Georgia law requires drivers to carry bodily injury liability coverage of $25,000 per person, or $50,000 per accident, and property damage liability of $25,000. However, lawmakers felt that was not enough. In a serious accident, hospitalization and the cost to repair a vehicle could quickly surpass the minimum coverage.

Before the new law went into effect, if an at-fault driver’s insurance policy did not pay all of the bills, the injured party’s insurance had to make up the difference. However, under the new provision, the total of both drivers’ liability coverage would be combined in the event of an accident.

Policyholders must reply to the notice by indicating whether they want the coverage, or they will be automatically switched to it.

To fully understand the new law, you first have to know a few definitions:

— An uninsured motorist violates state law because he or she has no auto liability insurance.

— An underinsured motorist typically has minimum limits or very low coverage for liability insurance should that individual cause a traffic crash, typically known as the at-fault driver.

Your insurer has already, or when your 2009 renewal comes up, will provide a letter or form to advise you that you can either keep your policy as is, or you can increase your coverage for a crash with an underinsured driver with what is called Excess UIM coverage.

In a crash with an underinsured driver, his or her insurer will likely pay up to the driver’s policy limits toward repair or replacement of your vehicle, and up to the policy limits for medical expenses for the not-at-fault driver and or the passengers in that vehicle who are injured.

If you keep your coverage the same as it was last year, the amount paid by the at-fault driver’s insurance will be deducted from any coverage you may have for a collision with an uninsured or underinsured driver.

Under the new law, your insurer will not deduct the amount paid by the at-fault driver’s insurance which means you will have more coverage than before.

Some insurers will add an additional premium only for the Excess coverage and others may not add additional premium. Under the new law, if you do not opt out by signing a form your insurer will send to you, the new coverage will automatically be added to your policy and to your premium if the insurer increases the cost of the Excess coverage.

The added protection may cause premiums to increase by an estimated $10 to $20, however drivers should contact their insurance agent to determine how their policy will be affected.

For those who may have tossed the form letter and later discover they were automatically switched, they may request their insurance agent to switch their coverage back to the smaller amount.

I suggest you do contact your insurer and ask how much the new coverage would be when by policy renews later this year. Since I drive a 2005 Toyota Highlander, my additional coverage will cost about $10 additional every six months or $20 per year. That amounts to about a three percent increase per year and it’s worth it to me.

Others, depending on their situation, may wish to opt out and that’s why it is important to talk with your agent or company so you can make an informed decision.

Keep in mind that with so many people losing their jobs due to the current U.S. economy, there may be more uninsured or underinsured drivers on the road. Advice from your agent or company will be very helpful.

David Colmans is executive director of the Georgia Insurance Information Service. Contact him at 770-565-3806 or by e-mail at dcolmans@giis.org .