Durham Underinsured Motorist Accident Attorney

Although all drivers are required to have minimum liability insurance, the fact is that often the minimum limits may not be adequate to cover all medical bills. Fortunately, all may not be lost when your bodily injury claim is greater than the policy limits for the at-fault driver’s liability insurance, as underinsured motorist coverage may be available to supplement some of the difference. Underinsured motorist coverage pays for some of your bodily injury claims when the at-fault driver does not have enough insurance to completely pay for your injuries and losses. In other words, underinsured motorist coverage can be used when the at-fault driver does not have the amount of coverage to adequately pay for your medical bills, lost wages, and pain and suffering.

How do I know if I have underinsured motorist coverage?

In North Carolina, if your insurance policy is greater than the minimum required amount, which is $30,000/$60,000 in North Carolina, then your policy will include underinsured motorist coverage. For more information on liability insurance and liability limits, please see here.

This means, for example, that if your liability insurance is $50,000/$100,000 or $100,000/$300,000, then your insurance policy is required by North Carolina law to include underinsured motorist coverage. However, if your vehicle is covered by only the minimum policy requirements, as mentioned above, your insurance will not provide underinsured motorist coverage. (Please note that you will be provided with uninsured motorists coverage. For more information, please visit this page.)

Who and what is covered by my underinsured motorist coverage?

Underinsured motorist coverage policies will usually only cover personal injury claims. Property damage is not typically included in underinsured motorist coverage policies, as there are other means to pay for property damage, such as collision coverage. An underinsured motorist coverage insurance policy will provide coverage to the owner of the vehicle, family members, any person driving the vehicle with the owner’s permission, and all passengers. In other words, if an operator is driving your vehicle with permission and is injured in an accident caused by an at-fault driver, your underinsured motorist coverage may be available depending on the at-fault driver’s policy limit.

When can I use my underinsured motorist coverage?

Generally speaking, underinsured motorist coverage is available when your coverage is greater than that of the at-fault driver’s. In other words, if you are in an accident in which the at-fault driver only carries the minimum insurance policy required by law ($30,000/$60,000), and your coverage is greater than that amount, then you may be able to use your underinsured motorist coverage once the at-fault driver’s policy is exhausted. You generally cannot use your underinsured coverage until the at-fault driver’s insurance has paid up to their policy limit amount. Furthermore, you must reach a settlement with the at-fault driver’s liability insurance before your underinsured motorist coverage is obligated to pay. While the practical application of these rules is significantly more complicated, let’s look at the following hypothetical situations for a better understanding.

Situation 1 – Let’s assume that you are in an accident caused by another driver. Both you and the at-fault driver only carry the minimum required coverage ($30,000/$60,000). In this instance, you will not likely have underinsured motorist coverage, as it is generally not available with minimum policy amounts.

Situation 2(a) – Let’s assume that you are in an accident caused by the other driver. The at-fault driver has the minimum policy amount ($30,000/$60,000). However, you have a higher policy amount of ($50,000/$100,000). Your personal injury claim ends up settling with the at-fault driver’s insurance company for $25,000. Under these circumstances, while you do have underinsured insurance coverage available because your policy amount is greater than the at-fault driver’s, you still would not be able to use it. Underinsured motorist coverage may only be used when the at-fault driver’s policy amount is exhausted. Therefore, you could only use your underinsured insurance if your personal injury claim was greater than $30,000 (the policy limit amount of the at-fault driver).

Situation 2(b) – Now, let’s assume the same facts from example 2, except that your personal injury claim is worth $40,000. Under these facts, you would likely be able to use your underinsured motorist coverage. Here, the $30,000 policy of the at-fault driver’s liability policy would be exhausted, as your personal injury claim is worth $40,000; the remaining $10,000 would come from your underinsured motorist coverage. It is important to note that because your underinsured motorist coverage policy limit in this hypothetical situation is $50,000, your underinsured motorist policy would be able to provide the additional coverage of $10,000.

Important Note: Remember, you must reach a settlement or judgment before your underinsured insurance provider is obligated to pay out on the policy.