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The Benefit of Uninsured/Underinsured Motorist Coverage

By October 6, 2020April 11th, 2024No Comments


Nearly every state requires drivers to carry minimum amounts of auto insurance, notably liability coverage. It pays for the costs of at-fault accidents that fall on the insured driver. They use this coverage to assist them when repaying others to whom they caused bodily injuries or property damage.

If you collide with another vehicle, but the wreck is not your fault, then the other driver usually has an obligation to repay you using their liability coverage. However, they could lack liability insurance to repay you, even though it is their duty to carry it. However, should these situations arise, you will often find that your own auto insurance offers coverage called uninsured motorist protection.

In North Carolina, uninsured motorist coverage is an essential part of auto insurance, and it even is mandatory protection for most drivers. By carrying it, you allow yourself to have extensive protection against situations that might prove beyond your control when it comes to auto liability claims.

What is uninsured motorist coverage?

Another driver might rear-end you at a stoplight, and in most instances, this type of accident is the other driver’s responsibility to pay for. They are supposed to do so using auto liability insurance. Unfortunately, even though states might require drivers to carry liability insurance, this does not mean that everyone will follow the rule of law.

Some drivers might drive uninsured. In other situations, though someone might have coverage, they might flee the scene of the accident and commit a hit-and-run offense. In these situations, they won’t have liability insurance to compensate you. As a result, you won’t have the recourse to file against their own auto policy for your losses.

However, if you have uninsured motorist coverage on your own policy, then you can use this coverage instead. Uninsured motorist coverage applies when you don’t have the benefit of using someone else’s liability insurance to pay for your own losses. The policy can cover two types of losses:

  • Bodily injuries: If an at-fault accident injures you or your passengers, then you can use this coverage to pay for your medical costs when the other driver lacks liability insurance.
  • Property damage: An at-fault accident might damage your vehicle or other property. This coverage can pay for the necessary repairs. It can even apply if someone hits your car (or immobile property) and flees the scene when you are not around to notice the damage.

Is underinsured motorist coverage different?

Many auto insurers also offer coverage called underinsured motorist insurance. This coverage pays when someone else is at-fault for a wreck, has liability insurance, but their liability policy limits do not adequately cover your losses. You can use your own underinsured motorist coverage after the at-fault driver’s liability policy pays up to its limits.

For example, suppose that in a car wreck, you and your passenger sustain injuries that total up to $500,000. However, the liability insurance of the at-fault driver will only pay for $300,000 of your medical bills. That’s a $200,000 deficit that won’t have coverage.

In this situation, you can first file against the at-fault driver’s liability policy. Once it pays up to its limits, then you can file against your own underinsured motorist coverage for the remaining damage costs.

Does North Carolina require this coverage?

As an at-fault insurance state, North Carolina requires drivers to carry both liability insurance and uninsured motorist benefits.

If you only buy the minimum liability insurance required by law, then your policy must also contain uninsured motorist coverage worth at least:

  • $30,000 bodily injury coverage per person
  • $60,000 bodily injury coverage per accident
  • $25,000 property damage coverage

Under these conditions, the policy will pay up to $30,000 for your injuries if you are the only person who gets hurt in a wreck. Or, if more than one person gets hurt, then your policy will pay up to $60,000 for all injured parties. The $30,000 per person limit still applies. A $25,000 policy limit will pay for all property damage, such as the damage your car sustains.

If you choose to increase your minimum liability coverage, then your policy must also contain underinsured motorist coverage (alongside uninsured motorist coverage). However, in North Carolina, underinsured motorist coverage only pays for bodily injuries and not property damage.

It is important to remember that this coverage does not replace your own liability auto insurance. Additionally, it is not coverage for your own physical damage when a wreck is your fault. To get this coverage, you will need to buy comprehensive damage coverage and collision insurance.

What will this coverage cost me?

As you add more coverage into your auto insurance policy, you are likely to see your premiums increase. Therefore, your uninsured and underinsured motorist protection will probably result in an added premium burden. However, the increase in your coverage usually is exceptionally manageable compared to the costs of an accident that doesn’t have requisite coverage.

If you have questions or concerns about adding uninsured motorist coverage to your policy, then your agent will be happy to help you figure out a solution. We can tailor your policy to meet your expectations and optimize your policy to apply requisite discounts to always help you save your coverage in the best possible way.