Insurance coverage on your vehicle with all of the confusing terms can be very tricky to understand. When choosing insurance coverage in their vehicle, most people in NC just select what is required, called “minimum policy limits.” It is typically the cheapest route and often what an agent will recommend. However, it is not the best and safest option in the event of a collision in almost every situation. In fact, it may leave you holding them back if another driver hits you and it is their fault if you do not have UIM coverage. Below is a short discussion on UIM and why you should consider having this coverage.
First, let’s talk about the difference in Uninsured Motorist (UM) coverage and Underinsured Motorist (UIM) coverage.
Uninsured Motorists (UM) coverage is used when the at fault driver failed to carry insurance, meaning, they were “uninsured.” If a person hits you and it is their fault in causing the accident and they sadly have no insurance, you need to have Uninsured Motorists (UM) coverage on your insurance policy. In NC, UM coverage is required as part of your policy which is the good news. So long as you are properly insured, UM will be on your policy and if you are hit by an uninsured person, you may use your UM to help compensate for bodily injuries. According to a study by the Insurance Research Council, in 2019 there were 12.6 percent of drivers in the United States that were uninsured!
Underinsured Motorists (UIM) coverage is used form your own policy when the at fault driver failed to carry sufficient coverage, meaning the extent of the bodily injuries exceeded the policy limits on the at fault driver’s policy. Here is an example of when UIM would be in play:
If Sally was the at fault driver and struck Sam’s vehicle, Sally’s liability insurance would be responsible for Sam’s injuries. However, if Sally carried the NC minimum policy limits of $30,000 and Sam’s injuries exceeded $30,000, then Sam could potentially receive the $30,000 from Sally’s liability insurance, plus additional funds from his UIM coverage. If Sam did not have UIM coverage, then the $30,000 would be the maximum that Sam would be able to receive, which could leave Sam out of luck in being properly compensated.
It is important to note that while UM is required in NC, UIM is not required in NC. UIM is often very affordable and extraordinarily helpful if you have injuries in a car wreck and the person who hits you has minimum policy limits. Therefore, if you are unsure of the details of your motor vehicle coverage, we would recommend that you speak with your insurance agent. If you were involved in a vehicle accident, then we would encourage you to contact us to schedule a free consultation with Attorney/Owner, Maggie Shankle. The details of navigating a Personal Injury claim can be tricky, and we can help look in to all options of coverage to help you understand your options.