The Wonders of Uninsured Motorist Coverage

Believe it or not, there are folks out there who drive around uninsured.  Some of those folks even crash into people from time to time.  

Believe it or not, there are folks out there who drive around uninsured.  Some of those folks even crash into people from time to time.  

This may come as a nasty shock to our less cynical readers, but sometimes people don’t do what they’re supposed to.  Sometimes folks “forget” to use a turn signal or pick up after their dog, and you might have even seen someone leave their shopping cart in the parking lot once or twice. I can’t complain too much, because in a perfect world my profession wouldn’t exactly, you know, exist.  But it’s undeniable that people skimp and cut corners all the time, and the results can be anything from irritating to downright dangerous.  You know, like how you're supposed to get car insurance before you go driving around?  Well, some folks don't do that.  We call them "uninsured."

Uninsured?! Do people really do that?

Let’s look at an example.  You’re sitting at a stoplight, hands at 10 and 2, checking your mirrors every few seconds, so on and so forth.  All of a sudden, a guy on his phone (let’s call him Bart) comes out of nowhere and smashes into you.  When the cops come, they discover that Bart doesn’t have any car insurance. 

So now you’ve got a smashed up car, a strained neck, and no idea how to pay your bills.  Bart cut a corner by electing not to purchase liability insurance - in violation of North Carolina law - and you’re the one who suffers because of it.  Outside of filing a lawsuit against Bart, you’re out of luck, right?  Wrong! 

Okay, so Bart's uninsured.  What's my next move?

North Carolina law requires drivers to carry liability insurance in the minimum amount of $30,000 per injured person and $60,000 per accident.  North Carolina law also requires drivers to carry another type of coverage, known as “uninsured motorist” or “UM” coverage.  UM coverage is different from liability in a number of ways.  The main difference is that liability insurance is “third party” coverage, meaning that it covers third parties who are injured by your negligence.  UM insurance is “first party” coverage, meaning that it covers you when you get hurt by an uninsured third party.  North Carolina auto policies have to carry UM coverage in the same amount as the liability coverage.  So if you have liability coverage of $30,000/$60,000 (like in the above example), your carrier also has to provide you with UM coverage in the same amount.

UM coverage doesn’t just apply to drivers who don’t have car insurance.  There are a host of situations in which you can access your UM coverage, such as:

  • When you’re the victim of a hit-and-run driver (don't forget about the “phantom vehicle” rule, which I’ll write about soon);
  • When the at-fault driver’s insurance carrier has become bankrupt;
  • When the at-fault driver’s carrier denies your claim (you’ll need a letter to that affect from them);
  • When the vehicle is insured, but the driver isn’t insured under the policy (often when the car has been stolen); or
  • When the at-fault driver has insurance, but you can’t figure out who the carrier is.

Awesome!  It sounds like UM coverage is a real lifesaver.

Keep in mind that opening a UM claim doesn’t automatically equate to coverage.  Your carrier can still deny your claim if they determine that the other driver wasn't liable.  Also, your premiums generally shouldn’t go up if you use your UM coverage.  As you can see, uninsured coverage is a great tool for when liability coverage leaves you in the lurch.  If you get in over your head, call a personal injury attorney!