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Understanding Automobile Insurance in North Carolina

When you are injured in an automobile accident in North Carolina, you need to understand the critical role insurance plays in determining your legal options. The following is a general overview of the various types of insurance that may be at issue.

What is General Liability Insurance?

General liability insurance is the insurance that protects the at-fault driver when they are involved in an accident. Under North Carolina law, a general liability insurance policy is required to have minimum coverage of $30,000 per person and $60,000 per accident. This means that the most the insurance company would have to pay (either through settlement or after a trial) would be the limits of the policy. If an injured party were to obtain a judgment against the at-fault driver in excess of the policy limit, the injured party would have to either try to get the rest of the money directly from the at-fault driver, or make a claim against their own underinsured motorist policy.

In North Carolina, the minimum liability limits are $30,000 for bodily injury per person, $60,000 bodily injury per accident, and $25,000 property damages.

Practically speaking, it is very difficult to get additional money out of the at-fault driver over and above their insurance policy limit. This is because most people are simply not wealthy enough to pay tens of thousands or even hundreds of thousands of dollars out of pocket to satisfy a judgment. For this reason, it is critical that you protect yourself with underinsured and uninsured motorist coverage under your own policy.

What is underinsured and uninsured motorist insurance?

Underinsured motorist (“UIM”) insurance provides you with additional coverage when the at-fault driver’s insurance policy is insufficient to compensate you for your injuries. For example, if the at-fault driver’s liability insurance policy limits are $50,000 and your injuries are worth $200,000, you could make a claim against your UIM policy to receive full compensation for your injuries.

One in eight drivers were uninsured in 2012. Uninsured motorist (“UM”) insurance provides you with coverage in the event the at-fault driver was completely uninsured.

Both UIM and UM insurance are fairly cheap to purchase and can make all the difference between inadequate compensation for your claim and full compensation. I routinely recommend clients purchase as much of both coverage as they can afford.

How to you make a claim under your underinsured or uninsured motorist policy?

UIM and UM claims are resolved in a similar way as claims directly with the at-fault driver’s liability policy with one very big difference: If you are unable to resolve the claim with your insurance company at a settlement amount that you think is fair, you have the option of demanding arbitration. With UIM and UM arbitration, the value of your claim is determined by a panel of three arbitrators chosen by you and the insurance company. The arbitrators are typically attorneys or retired judges. The arbitration is typically held at a lawyers office where both sides are allowed to present evidence of the claim to the arbitration panel. The arbitrators often ask questions of both sides throughout the arbitration, which typically takes a few hours. The arbitrators will then meet together after the arbitration to decide how much to award, and will give notice to both parties of the award amount.

In North Carolina, arbitration panels tend to be fairly generous with their awards, and I have found this to be a good way to resolve a UIM and UM claim when the insurance company refuses to fairly compensate their insured.

If you have questions about the role insurance plays in your claim, please feel free to contact us.