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Does Workers’ Compensation “Offset” a Georgia Uninsured Motorist Carrier’s Liability for a Car Accident?

Uninsured motorist (UM) coverage provides valuable protections for Georgia residents who are injured in a car accident caused by a driver who either failed to purchase insurance–in violation of the law–or lacks sufficient coverage to fully compensate the victims for their losses. All Georgia insurers are required to offer UM coverage and must adhere to certain restrictions contained in state law. Even if a customer agrees to the terms of a UM policy that conflicts with state law, that does not override the law, nor does it permit an insurer to escape liability.

Georgia Farm Bureau Mutual Insurance Company v. Rockefeller

Consider this recent decision by the Georgia Court of Appeals. This case involves a UM policy held by the the defendant, who was injured in a two-car accident with another driver. The defendant said the other driver caused the accident and filed a personal injury lawsuit against him in Georgia state court. Because the defendant had reason to believe the driver was “underinsured,” he also served his UM carrier, the plaintiff in the present case.

Ultimately, the other driver paid the defendant the limits of his auto insurance policy, which was just $25,000. This was not enough to cover the defendant’s losses. Consequently, he sought coverage from his UM carrier. The insurer balked, however, citing the fact the defendant received just under $200,000 from his employer’s workers’ compensation insurer because the car accident occurred in the course of the defendant’s employment. In effect, the insurer maintained the workers’ compensation payments reduced its liability for the accident to zero.

The courts disagreed. The Court of Appeals, affirming a trial judge’s earlier ruling, said that while Georgia’s UM law does permit an insurer to “offset” its coverage by the amount of any workers’ compensation payments received by the insured, that did not completely eliminate the plaintiff’s liability here. This is because the defendant’s workers’ compensation only covered his medical expenses and lost wages. This is just a small part of the total damages a car accident victim may suffer. Indeed, the Court of Appeals noted that workers’ compensation does not provide for all lost wages or “damages for past and future pain and suffering and future medical expenses resulting from the accident.”

Despite this, the insurer also cited language in the UM policy itself that purports to create a “limit of liability” based on the defendant’s receipt of compensation from other sources like workers’ compensation. The Court of Appeals also rejected this argument. While the “plain language” of the policy does contain such limits, “such a provision is not authorized by the UM statute,” and is therefore unenforceable as a matter of law. As the Court put it bluntly, an insurance policy cannot override state law.

Accordingly, the Court of Appeals said the insurer was potentially liable to the defendant up to the combined limits of his UM policies–he had four in total–which is $100,000.