No one wants to be involved in a car wreck. Believe me, as a personal injury attorney I've seen my share of injured clients. And while the physical injuries are difficult enough for my clients to deal with, I've witnessed financial hardships accident victims have gone through who received little or no financial compensation. Why? Because they didn't carry uninsured motorist insurance (UM) or underinsured motorist insurance (UIM).
What Can Happen if I Don't Carry UM or UIM?
First of all, if your car is insured in North Carolina under a personal policy, you automatically have UM. That's because in 2009, it became mandatory for all insured drivers in the state to carry uninsured motorist coverage. Uninsured motorist coverage is just what its name implies - it covers you if you are injured by an uninsured driver.
When you or your passengers are involved in a car wreck - whether you're a driver, a pedestrian, riding a bike, etc., - the "at fault" driver (or their insurance company) is typically responsible for paying your medical bills and other related expenses. Even though medical bills can potentially reach tens of thousands of dollars, North Carolina only requires a minimum of $30,000/$60,000 in auto insurance:
- $30,000 is the maximum insurance will pay to one individual
- $60,000 is the maximum amount it will pay to all injured victims. In other words, no matter how many people are hurt, the insurance company will pay out no more than $60,000 divided among them, whether that amount covers their bills or not.
Roughly One of Every 11 NC-Licensed Drivers is Not Insured
Although car insurance is mandatory in North Carolina, the latest statistics (2012) from the Insurance Information Institute show that 9.1% of North Carolina drivers do not have car insurance. That means roughly one of every 11 NC drivers you might encounter along I-40 have no insurance to help pay medical and other bills if they sideswipe you - maybe while texting!
Here are three primary situations to be aware of where underinsured or uninsured drivers can make your life miserable if you don't have UM or UIM:
- Driver is not insured at all (the 9.1%)
- Driver flees the scene in a hit and run
- Driver does not have enough auto insurance
Let's look at a couple of scenarios to see how the three situations above would play out with and without UM or UIM.
Uninsured Motorist Coverage (UM)
Driver 1 is not paying attention and rear-ends your car. Driver 1 is cooperative, but has no insurance. You could take her to court, but there is a decent chance she is judgment proof. Being judgment proof in North Carolina means you may not be able to go after a bank account or other property to collect. Depending on the circumstances, this means you could sue her and even win, but you may never see any of the money you "won" from the lawsuit. If you have UM, you can file an uninsured motorist claim with your own insurance company. And since you were not at fault, you have an opportunity to be compensated fairly without your rates going up.
Now let's assume Driver 2 runs into you as you're walking on the sidewalk. He flees the scene, and the police are not able to catch him. If there's no driver, there's no one to go after for your medical bills. UM coverage may also help you in this scenario, by potentially allowing you to recover money - without your rates going up.
Underinsured Motorist Coverage (UIM)
Unlike uninsured motorist coverage, underinsured motorist coverage is optional in North Carolina. That being said, UIM is fairly cheap and can save you a lot of money and headache if you're seriously injured. As the name implies, underinsured motorist coverage applies when a driver is underinsured, meaning they do not have enough insurance to cover your medical bills or damages.
Here's how it might play out. When you are injured by a negligent driver, you first collect from their insurance company. If the driver does not have enough insurance to cover your medical bills and other expenses, then you could potentially be stuck paying those bills yourself - unless you have underinsured motorist coverage. As discussed earlier, the person who hit you may be judgment proof, and you may never collect the full amount due, even if you get a successful verdict in the lawsuit. So to get the money you need for bills, you may be able to file an underinsured motorist claim. This may potentially cover the difference from what the other guy's insurance pays and the bills you owe.
As an example, let's assume Driver 3 injures you and your claim is worth $80,000. Driver 3 admits fault, but only has the $30,000 minimum insurance required in North Carolina. This means his insurance company would only be required to pay you $30,000. After collecting the full $30,000 from his insurance company, you still have $50,000 in bills. If you have underinsured motorist coverage, and depending on the amount of your policy, your insurance company may cover the difference.
These scenarios - which our law firm deals with far too often - represent why I emphasize the need for UM and UIM. Each can be a financial life saver. And filing a claim with your UM or UIM shouldn't make your rates go up.
Do I Need an Attorney for UM or UIM Claims?
Based on my experience, typically the answer is YES. Even though you are dealing with your own insurance company, experience has taught me that they may try to pay you the least amount of money possible. That's why it can be important to have someone fighting for you who knows the system. You may have had nothing but good experiences with your agent or a customer service rep in the past, but all that love can potentially change when money is on the table. If you find yourself in one of these or other unfortunate scenarios, contact one of our personal injury attorneys by clicking here or call 1-866-900-7078.