Personal Injury – Insurance Issues

In North Carolina, all owners of registered vehicles must carry insurance coverage.  Vehicle owners are only required to carry liability insurance on their vehicles.  Liability coverage is insurance coverage in the event someone hits another driver.  The problem is that the minimum coverage for liability insurance is $30,000 per person/$60,000 per accident.  So, if another driver hits your vehicle and you are injured and they have minimum coverage, there is only $30,000 available to you for your injuries.  If there are multiple people in your vehicle, then the maximum amount available for the accident is $60,000.  Thus the importance of UIM coverage.

UIM stands for underinsured motorist coverage.  With all of the ads by insurance companies about saving money on your car insurance, this seems to be the most overlooked and undersold coverage.  Clients have told me that their insurance agents told them they did not need underinsured coverage.  UIM is coverage to protect YOU.  If you only carry minimum liability insurance ($30,000/60,000), then you cannot get UIM coverage.  In order to get UIM, you must carry more than minimum liability coverage.  If you carry $100,000 per person liability coverage then you have $100,000 UIM coverage.  So, if you were in a car accident and the other driver was at fault, then there would be $100,000 in insurance coverage for you, not just $30,000.  Here’s how it works.  If your injuries are such that a $100,000 settlement or judgment would be appropriate, then you would collect the $30,000 from the insurance company for the other driver and then seek the other $70,000 from you insurance company under your UIM coverage.  It is $100,000 total.  Your insurance company gets credit for the liability amount.  If the other driver had $50,000 liability coverage, then you could collect up to $50,000 from your insurance company.

Insurance agents may tell you that you can save money on your car insurance by rejecting UIM coverage or by selecting a lower amount.  You can chose either, but you have less money to recover from in the event of an accident.

U.M. coverage is uninsured motorist coverage.  This is insurance coverage in the event someone causes an accident and they do not have any insurance coverage.  If you carry minimum liability insurance, then you have the same amount of UM coverage.  If you carry a higher liability amount, then you get the same amount of UM coverage, unless you select differently.

UM and UIM benefit YOU and your passengers.