Georgia Insurance Law Does Not Allow Setoff For Medical Payments
Many insurance companies improperly seek reimbursement for medical payments they have made to the insured when the main case settles for the limits of the uninsured motorist coverage ("UM") portion of our client's policy. The Georgia Court of Appeals has held that a non-duplication of benefits clause is only enforceable when the insured's damages are equal to or below the UM coverage limits of the policy. Johnson v. State Farm Mut. Auto. Ins. Co., 216 Ga. App. 541, 544, 455 S.E.2d 91 (1995); Jenkins & Miller, Georgia Automobile Insurance Law (2008-09 ed. 2008) pp. 499-500.
To quote Jenkins & Miller, "This is because, in such circumstances, the clause only reduces the UM coverage by the amount of the prior payment under the med pay coverage of the policy, without reducing the insured's recovery of all his actual damages. citing Johnson, 216 Ga. App. at 544; see Yates v. Dean, 244 Ga. App. 333, 334(1), 535 S.E.2d 335 (2000).
A non-duplication of benefits provision is not enforceable when the insured's actual damages are greater than the policy limits. Johnson at 544; Hudson v. Whited, 250 Ga. App. 451, 453-54, 552 S.E.2d 447 (2001). To do otherwise would operate to reduce the insured's recovery to an amount below the actual damages and that would violate the statutory requirement that the automobile liability policy must contain an endorsement undertaking to pay the insured all sums which he shall be legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle, within the limits [of the policy]. Jenkins & Miller (2008-09 ed. 2008), p. 500.
As an Atlanta car accident lawyer, my advice to you is to not agree to any offsets of payments until the appropriateness of such proposed offset is confirmed by an experienced auto accident attorney, who should be well-versed in these types of insurance coverage issues.
