The Quickest, Simplest Explanation of NC Underinsured Automobile Motorist Coverage
I recently had a client run into a situation where the person who caused his accident didn't have a lot of insurance compared to the value of his claim. This led to us looking into his Underinsured Motorist Coverage to see what other options he might have to help cushion the blow of his injuries and bills. Like most people he had many questions about his predicament, which sounded like most clients' questions in similar circumstances: What is Underinsured Motorist Coverage? Do I have it? Do I need it? How do I know? This should help you at least get started in figuring this out... First, Underinsured coverage is different from Uninsured coverage. You access Uninsured motorist coverage when the person who hit you has NO insurance at all. You have access to Underinsured coverage when the person who hit you had some auto liability insurance, but just maybe not quite enough relative to the damages they caused you. Best way to clarify this is by example, but first, some information:
Minimum automobile liability policy limits in NC is $30,000/$60,000. That means $30k per person/$60k per accident. What that means is if a person with that coverage causes injuries to another person, the most the insurance company will pay to cover those damages is $30k to that injured person. If there are two injured people, then each can get up to $30k; if there are three, then none of them could get more than $30k individually, and totally their take would not exceed $60. There is always the possibility of suing the person and executing a judgment on their assets if you get a judgment in excess of the policy limits (if the insurance company can't be convinced to pay more, which is sometimes possible) but that is another blog entry altogether.
So, let's say minimum limits person hits me and I have a 50/100 policy, which means I have $50k underinsured coverage generally, unless my insurance company had me sign a rejection note saying I didn't want it. Then bad guy's policy can pay me $30k maximum, but if my insurance company thinks my claim is worth more, it will pay me more on top of the $30k but will top out at a total recovery of $50k. So, that means in this situation I have access to up to $20k in extra coverage over the bad guy's $30k.
Having a minimum limits policy with underinsured limits at $30k is, as you might guess, pretty worthless in NC, since everyone has to have $30k; it's the same as having no underinsured coverage. However, someone from another state could hit you and their policy limits might be lower than ours, in which case you might have some excess coverage,but not a lot.
UIM coverage (that's what we in the business call Underinsured coverage) is worth having, without doubt; it just needs to be high. Every personal injury lawyer in the state that I know has monstrously high extra UIM coverage because of these scenarios. It's one of those "you don't know you need it until you needed it and it wasn't there" things. We just happen to see people who need it and jump on getting that coverage soon.
If you're reading this, hopefully you're not in a position where you actually need it. If that's the case, call your insurance agent and get some substantial UIM coverage right now! If someone with no assets hits you and they only have $30,000 and they paralyze you, that might be all you can get! Bump that stuff up to $1,000,000 if you can. You'll sleep better at night.
On the other hand, if you're reading this because you're facing difficulty with your insurance company or the other driver's insurance company after you've been in an accident, contact an attorney. It won't hurt nearly as bad as that wreck, and they might even be able to help.