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What is Underinsured Motorist Coverage?

By R. Kenneth Helms, Jr. January 3, 2018

Personal Injury

Insurance coverages can be confusing.  North Carolina law requires minimum liability coverage in the amount of $30,000 Bodily Injury for each person, $60,000 total Bodily Injury for all persons in any one collision and $25,000 for Property Damage.  North Carolina law also requires uninsured/underinsured motorist coverage.  Auto insurance policies with the minimum bodily injury and property damage limits are required to include uninsured motorist coverage. Policies with limits greater than the minimum must provide combined uninsured/underinsured motorist coverage.  So what does this mean and why should you care?

The short answer is that it is complicated, but I will focus on underinsured motorist coverage and discuss other aspects at a later date. Underinsured motorist coverage is purchased by you to protect you from at-fault drivers who do not have enough insurance to compensate you for the injuries and medical bills you have suffered as a result of their negligent actions.

If you have been injured in a motor vehicle collision,  you have to endure pain and suffering through no fault of your own, and you have to deal with the medical bills from your injuries.  This makes the amount of insurance coverage the at-fault driver has very important.  It doesn’t matter to the at-fault driver’s insurance company that your medical bills are multiple times larger than the amount of the at-fault driver’s insurance coverage.  All the at-fault’s insurer has to pay is the maximum amount of its policy limits.  Most at-fault drivers do not have money to pay you any amount above their policy limits.  This makes underinsured motorist coverage very important to you.

How does Underinsured Motorist coverage work?

Once the at-fault driver’s insurance company agrees to pay the limits of its coverage, you must then turn to your underinsured motorist coverage and your insurance company to attempt to be compensated for the remainder of your damages.  There are certain notices and time limits that must be complied with or you could be prevented from receiving your underinsured motorist coverage for which you have paid premiums.  In many cases you will have to negotiate with your insurance company in order to collect your underinsured motorist coverage.  If you cannot agree with your insurance company on the amount you should be compensated for your injuries, you may have to move forward with legal proceedings to determine the amount of your underinsured motorist coverage that your insurance company must pay.  Additionally, your insurance company gets credit for the amount of the at-fault driver’s liability policy limits.

For example, if the at-fault driver has $30,000 in liability insurance, you have $150,000 in losses and $100,000 in underinsured motorist coverage; then, in this scenario, there is only $100,000 available to compensate you for the $150,000 in losses.  Your underinsured motorist coverage is reduced by the amount of the at-fault drivers coverage ($30,000), leaving $70,000 of your underinsured motorist coverage available to compensate you.

How can I protect myself against underinsured drivers?

First, review your auto policies.   If you don’t think you have enough Underinsured Motorist coverage to protect you and your family, then contact your insurance agent and determine how Underinsured Coverage you can buy and how much it costs.

If you have been injured in a motor vehicle accident through no fault of your own and the at-fault driver does not have enough insurance and you have underinsured motorist coverage, Helms Law Group, P.A. has attorneys that can guide you through this confusing and frustrating process.  Our experienced attorneys have handled underinsured motorist claims many times.  If you are interested in scheduling a free consultation, please contact R. Kenneth Helms, Jr. at 704-289-4577.