When Does Uninsured Motorist or Underinsured Motorist Coverage Apply in North Carolina?

North Carolina law mandates that all personal vehicles (non-commercial/non-fleet) have uninsured motorist (UM) coverage as part of your insurance policy. UM coverage must fall between $30,000 per person / $60,000 per accident and $1,000,000 per person / $1,000,000 per accident for bodily injury. UM property damage limits must fall between $25,000 and the highest property damage liability limits for any one vehicle insured under the policy.

Uninsured motorist coverage applies when the at-fault vehicle in an accident has no insurance or whose insurance either fails to meet state-mandated minimum liability requirements or is unable to financially pay it. If you are the victim of a hit-and-run accident, this coverage may also apply. Here’s an example of how UM coverage works – If you have the minimum coverage of $30,000 and you suffer $50,000 in bodily injury as a result of a collision where the at-fault driver was uninsured, your insurance would pay $30,000 and you will be left with the remaining $20,000 to pay by yourself.

Underinsured motorist (UIM) coverage is distinct from UM and applies when the at-fault vehicle in an accident has insurance, but the amount was not sufficient to cover the injuries or property damage caused. In these cases, the at-fault driver’s insurance pays the policy’s maximum amount, and your UIM coverage kicks in to cover the balance. Keep in mind, however, that the amount paid by the at-fault driver’s policy is first credited against your policy’s underinsured motorist coverage, therefor your UIM coverage must be greater than what the other driver’s policy paid in order for it to apply.

For example, let’s say the amount of bodily injury was $100,000, the at-fault driver’s policy limit was $30,000, and your UIM coverage is for $50,000. The at-fault driver’s insurance will pay $30,000. Then your UIM coverage applies that $30,000 as a credit and pays the remaining $20,000 of your coverage limit. That leaves you with $50,000 of medical bills that are not covered by either party’s insurance at the covered limits in this scenario.

It’s always a good idea to request higher coverage limits on your vehicle policy so that you are protected as much as possible in the event of an accident. Stewart Law Offices is there for you when you need help. For assistance with your North Carolina case, call us at 866-783-9278. Attorney Beau Wilder handles all NC cases for Stewart Law Offices.

Note: This information is for informational purposes and does not constitute legal advice. You can only receive legal advice by meeting with an attorney.


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