Insurance plays a vital role in helping preserve the financial stability of a family. While we all hope that we never have to rely upon our policies, we are quite thankful we have insurance when disaster strikes. Uninsured or underinsured motorist coverage is one such policy. If you were hit by a teenager out for a joyride in a “borrowed” car and the vehicle had no coverage that extended to the thieves, how would you pay for the damages?

If you have comprehensive personal auto policy coverage, your policy should cover the repairs to your car, as well as any injuries you or your passengers may have received after you have paid your deductible. But, what if you were seriously injured? What if your medical bills exceed your policy limits?

While being in a wreck with a stolen vehicle may be farfetched, consider our strained economy the past few years. Many drivers have opted to carry only the minimum, while others have let their insurance lapse.

In general, to be fully covered for an accident with an uninsured or underinsured motorist, you need UM coverage, which is optional in Georgia. UM coverage insures against injuries you receive in an accident caused by an uninsured driver, an underinsured driver or a hit-and-run driver. Furthermore, this coverage covers bodily injury to your passengers and may cover earnings you or your passengers lose as a result of the accident.

Not only should you purchase the same amount of UM coverage as liability coverage, but also consider purchasing “excess” versus “set off” coverage. Set off coverage determines your available coverage by deducting the underinsured driver’s liability limit from your limit. For example, if you have damages of $95,000, and the at-fault driver had a liability limit of $25,000, he would be underinsured. If you have $75,000 uninsured motorist set off coverage, the amount your insurance pays is reduced by the other driver’s $25,000 limit; thus, providing you with only $50,000 of coverage. Between the two policies, you have only $75,000 in coverage. If this were an excess policy, nothing is deducted, and you should have $100,000 of coverage.

Additionally, if you have a personal liability insurance policy to cover you and your family above your auto liability and homeowners’ insurance policy limits, you can often buy extra uninsured motorist coverage. This coverage can be added to your umbrella policy for a reasonable rate.

By having enough uninsured motorist coverage, you no longer put yourself at the mercy of drivers who can neither afford insurance nor afford enough insurance because of their driving history.

William G. Lako Jr., CFP, is an executive in residence at Kennesaw State University’s Coles College of Business and a principal at Henssler Financial. Lako is a certified financial planner.The MDJ will periodically publish columns from KSU business faculty.