If you have ever been in an accident, then you know that insurance plays a major role in how you receive compensation. In North Carolina, both Liability and Underinsured Motorist Insurance (UIM) is required. However, there are some important distinctions between the two. This article will explore the differences between Liability Insurance and Underinsured Motorist coverage and then discuss how they can work together to get you the compensation you deserve.
Liability versus Underinsured Motorist Coverage
There are a few key differences between Liability and Underinsured Motorist coverage.
Are they required?
In North Carolina, all registered vehicles are required by N.C.G.S. § 20-309 to have liability insurance. However, Underinsured Motorist coverage is not always required. According to N.C.G.S. § 20-279.21, if you have a minimum liability policy, UIM coverage cannot be added. This means that many people don’t have UIM. If you have a liability policy that exceeds the minimum requirements, you are required to have UIM too.
What do they cover?
Liability insurance covers both property damage and bodily injury that you may cause to other drivers. It exists to help you pay for damages that you cause and will not cover or pay for your own damages if you are at-fault for an accident.
Om contrast, UIM covers you if you are in an accident and the at-fault driver is underinsured and causes you injury. An underinsured driver is someone whose liability insurance limits are less than your UIM limits and not enough to cover the damages they caused in an accident.
Why is this important?
Sometimes, the liability insurance limit of the at-fault party may not be enough to compensate you for your damages. If that’s the case and you have UIM, your own UIM may kick in and help compensate you.
For example, let’s say that Wallace rearended you at a stop light. The accident was not your fault, so Wallace’s liability insurance can compensate you. Your accident is valuated at $50,000. However, Wallace only has $30,000 in liability insurance. That means that there is $20,000 that you cannot recover from Wallace. As you can see, Wallace was underinsured. Luckily, you have a $100,000 UIM policy. Your UIM can kick in to help cover that remaining $20,000.
Occasionally, you may be able to get more money out of UIM than liability. If Wallace rearended you at a stoplight and hurt two other people as well, you may have to share Wallace’s liability insurance with them too. Since Wallace’s policy has a cap, you might not get as much from the shared pot as you would from your own UIM insurance.
In conclusion, it is important to understand how Liability Insurance and Underinsured Motorist coverage work and how they may both be leveraged to help you get the compensation you deserve.
If you or a loved one needs assistance with a personal injury matter in North Carolina, please reach out to a lawyer at Wallace Pierce Law by calling (919) 313-2729 or contact us online for a free consultation. Personal injury claims can be confusing, so don’t wait to get the help you need! The sooner you get started, the sooner you can begin seeking the compensation you deserve.