Understanding Insurance

All states require some minimal level of insurance for those who drive cars on public roads. These requirements vary by state. Many drivers purchase the minimums required by their state; others, unfortunately, choose to drive without insurance.  Understanding insurance and how it works is important so that if you are involved in an auto accident you have the best chance of recovery.

Insurance Components

There are several insurance components that may come into play in your (or the other party’s) insurance policy. Bodily injury liability insurance covers others who are injured when you are at fault in an auto accident. This type of insurance does not cover injuries for you or your passengers if you caused the accident. Personal Injury Protection (PIP) coverage is not usually required by law, but does pay your medical expenses and lost wages if you are at-fault in the accident. It also covers any passengers who were in your car and were injured. Med Pay coverage pays medical expenses only for anyone in your vehicle, regardless of who was at-fault.  Property damage liability coverage pays for damage you cause to another’s vehicle or other property (fences, walls, etc.) if you are at-fault. Damage to your vehicle would be covered under an optional collision policy if you were at-fault.

Insurance Minimums

When you look at insurance requirements, they are typically stated in the formats shown here:

  • North Carolina                   30/60/25
  • South Carolina                   25/50/25
  • Tennessee                         25/50/15

The first number is the bodily injury liability insurance limit (in thousands). This means that if you are injured in an auto accident in North Carolina (for example) caused by another person with this level of coverage, your medical bills, lost wages and other damages related to the accident would be covered up to $30,000. The second number ($60,000) is the total amount that would be paid for all bodily injury claims in the accident, so if you had two passengers in your vehicle who were also injured, the maximum paid on all three claims would be $60,000 with each individual’s claim limited to $30,000. The final number is the dollar limit for property damage as the result of the accident, so up to $25,000 in damage to your vehicle or other property would be paid under the at-fault party’s insurance. If the insurance coverage is not sufficient to cover all claims, your own under-insured motorist coverage may come into play or, if the at-fault party has assets, he or she may end up having to pay the difference out of those assets. Even if you have not been in an accident, if you have assets, you may wish to review your insurance coverage to verify that you are protected.

Uninsured Motorist coverage is required in some states, including North Carolina and South Carolina. This insurance protects you in the event that the at-fault party is not carrying insurance as required by law. UM insurance will pay your medical expenses and lost wages up to the coverage limits you have purchased.

Once you have been in an auto accident, you must notify your insurance company of the accident. They will then assign an insurance adjuster to work your case. (Note that if other parties were involved in the accident, their insurance companies will do the same.) The insurance adjuster works for the insurance company and will investigate the accident on their behalf.

At some point, the insurance adjuster will make you a settlement offer. This offer should include all medical expenses, lost wages and property damage, up to the insurance limits of their insured’s policy. When you are calculating your medical expenses, do not forget to include any bills that were paid through another source; this can include your medical insurance, workers’ comp, etc. In most cases, these bills must be repaid out of your settlement. These claims are known as subrogation claims. The settlement amount offered by the insurance company can vary significantly and is often dependent upon your negotiation skills. You should NOT accept a settlement offer unless you are absolutely certain that it will cover all of your current and future expenses related to the accident.

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Our lawyers at Merritt Webb are anxious to aggressively represent your interests and ensure you receive just compensation for your injuries and losses. If you need an auto accident attorney either call us at 1.800.556.8404 or click here to fill out a short Auto-Truck Accident Submission form.

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