Uninsured Motorist Setoffs

On November 21, 2007, the Supreme Court of Georgia issued an important opinion in Dees, et al. v. Logan, involving uninsured motorist coverage in the state of Georgia. The question presented to the Supreme Court was whether a damage award to an insured can be offset by workers’ compensation or similar benefits paid to the insured. The Court answered with a resounding “No”.
Dees and his wife brought suit against a defendant seeking damages for injuries suffered in an automobile collision. The jury awarded the Dees $130,000 for lost wages, $4,939 for reimbursement of COBRA payments, $10,000 for pain and suffering and $5,000 for loss of consortium. The Dees uninsured motorist carrier, State Farm, argued that it could offset the jury’s award by the amounts Dees had already received in workers’ compensation benefits, social security disability benefits and a pretrial settlement with the defendant’s liability insurer. The State Farm argument was based upon policy language that “any amount payable shall be reduced by any amount paid or payable to or for the insured: (a) Under any workers’ compensation, disability benefits or similar law”.
The trial court accepted State Farm’s argument and ordered that the Dees recover nothing from State Farm under their uninsured motorist policy. The Court of Appeals upheld the trial court.
However, the Supreme Court, interpreting the Georgia uninsured motorist statute. held the only damages which may be set off are those involving property or physical damage. Thus, the Court held that there could be no set off of benefits received for personal injury.
The Supreme Court soundly rejected State Farm’s argument that the Dees would be gaining a double recovery if it were now allowed to set off the benefits. The Court pointed out that State Farm is not paying twice; but, the Dees were merely recovering sums due from the defendant, the owner of the uninsured motor vehicle, and benefits they were otherwise entitled to receive from other sources.