Uninsured and Underinsured Motorist Coverage

If you have ever been in an auto accident, you may have had experience with a driver who was uninsured or underinsured. There are several reasons why this happens:

  1. A driver purchases the minimum insurance level specified by state law. While the minimum insurance levels may seem sufficient, medical expenses continue to rise. It doesn’t take a catastrophic injury to exceed the coverage levels available.
  2. Drivers may not be able to afford coverage and may allow it to lapse.
  3. There are also drivers on the road who have had their licenses suspended and/or insurance cancelled but continue to drive, putting others at risk.

So what happens if you are injured in an auto accident by a driver who is uninsured or underinsured?

The at-fault driver’s bodily injury liability insurance should pay your medical bills[1], lost wages and other damages from an accident. Likewise, the damage to your vehicle should be covered by their property damage liability insurance. Assuming the at-fault party is insured, but their coverage is not sufficient to pay all the expenses, your UI/UIM policy would cover the difference, up to the limits you purchased. (Note that UI/UIM coverage is required in both North and South Carolina.) If the combined policies are still not sufficient to cover the damages, you, as the injured party, would be able to file a civil lawsuit against the person in an attempt to recover your expenses through a judgment that would allow you to levy on any assets owned by this person (note that some assets are exempt and may not be levied upon).

Unfortunately, if the at-fault party does not have any insurance, your UI/UIM policy would immediately come into play. Again, your coverage may not be sufficient to pay all damages, and, in many cases, the reason the driver was uninsured is that he or she simply couldn’t pay the premiums. In cases like these, you may or may not find assets to recover any judgment awarded in your favor.

This is a very simplified example. In some cases, additional insurance policies may come into play. This is especially true if the accident involved someone who was a commercial driver (or truck driver) or was driving on behalf of their employer. There are many factors that come into play when an injured party seeks to recover damages from an auto accident. An experienced auto accident attorney can review the facts of your case and counsel you on your options.

A special note to our readers: Even if you have not been involved in an auto accident, you may wish to speak with your insurance agent and have him or her review your coverage. This is especially true if you own assets that might be at risk in the event you were ever at-fault for an auto accident.


[1] North Carolina tort laws were amended last year (S.L. 2011-283) to enact a new evidence rule under which proof of past medical expenses is restricted to evidence of the amount actually paid or required to be paid to fully satisfy the bills.

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