North Carolina law requires every driver to carry automobile liability insurance in the minimum amount of 30/60/25. This means a driver must be insured for a minimum of $30,000 bodily injury or death per person / $60,000 bodily injury or death per accident / $25,000 property damage of others in any one accident.
In plain English, if an at-fault driver with minimum limits causes a wreck with you, you have one other person in the car with you, and both of you are injured, the most that the at-fault driver’s insurance will pay is $30,000 for each you and the other person. However, if you have two or more people in the car with you, and all of you are injured, the most the at-fault driver’s insurance will pay is a total of $60,000 – and that $60,000 is split between you and the other people. Also, the most the at-fault driver’s insurance will pay for your car is $25,000. It doesn’t matter if it is a brand new car that you just drove off the showroom floor and for which you just paid $35,000.
So what can you do to protect yourself and your loved ones from the drivers out there who carry minimum limits?
First, let’s understand the basic components of coverage available:
- Bodily liability insurance will pay for damages to other people as a result of an accident caused by you or another covered driver. Examples of damages include medical and funeral expenses, lost wages, disability, rehabilitation, and pain and suffering. Bodily liability insurance also provides for a legal defense if another party in the accident files a lawsuit against you.
- Property damage liability insurance will pay for damages to other people’s property as a result of an accident caused by you or another covered driver. Examples of damages include the repair or totaled value of another person’s vehicle, a child car seat, or a motorcycle or bicycle helmet.
- Medical payments coverage pays for reasonable and necessary medical and funeral expenses due to an automobile accident. There may also be coverage if you are injured by a vehicle as a pedestrian.
- Uninsured (UM) motorist coverage will provide protection when an uninsured driver, who is at-fault, injures you or another covered individual.
- Underinsured (UIM) motorist coverage will provide protection when an underinsured driver, who is at-fault, injures you or another covered individual. An underinsured driver is one whose limits of liability coverage are less than your UIM limits, and not enough to cover the losses of the people the underinsured driver injures in an at-fault accident.
Now that you understand what basic coverages are available, let’s talk about how they can protect yourself and your loved ones.
- Decide on the level of liability coverage you want to carry to protect you should you be the at-fault driver. In the event of a serious accident, you want enough insurance to cover a judgment against you in a lawsuit, without jeopardizing your personal assets. Depending on your insurance carrier, you can move up the line from the statutory minimum limits to 50/100, 100/300, 250/500 and even more. We suggest that the minimum you should carry is 100/300/100. This will provide $100,000 bodily injury or death per person / $300,000 bodily injury or death per accident / $100,000 property damage of others in any one accident.
- Decide on the level of medical payments coverage you want to carry. Medical payments coverage comes in especially handy if you have high deductibles or co-pays on your health insurance. The most common amounts are $1,000, $2,000 and $5,000, although higher coverage is available. For most people, medical payments coverage of $5,000 is sufficient. One important factor to keep in mind with regard to medical payments coverage is that it covers you and everyone in your covered vehicle – regardless of whether you are at-fault or if the other driver is at-fault.
- Decide on the level of UM/UIM coverage you need to carry to protect you and your loved ones. At a minimum, you will want your UM/UIM to match your liability coverage (keeping in mind that you cannot have UIM if you only carry minimum liability limits). While in a perfect world there are no uninsured motorists, you need to be protected from the reality of the situation. Factors to consider are the high cost of medical bills, time out of work, and what it would take to fairly and adequately compensate you if you are severely hurt in a wreck that is someone else’s fault. Your UIM will pick up after the at-fault driver’s carrier offers to pay its limits.
- Here’s an example: The at-fault driver has 30/60 and you have 100/300, but your loss is worth more than $100,000. The first $30,000 would come from the at-fault driver’s liability coverage. The next $70,000 would come from your UIM coverage. This would result in a total payment to you of $100,000. Obviously, if your UM/UIM is more than 100/300, the compensation to you would change.
- It is easy to have high medical bills if you have to spend any time in a hospital and have surgery. Add to those bills the amount of your lost wages as you miss time from work. You may need to review your coverage with your insurance agent and decide that you need more than 100/300 in UM/UIM.
There are some other types of coverage (towing, roadside assistance, rental, etc.) that you can get with your automobile insurance, but understanding the basic types of insurance will go a long way toward helping you make an informed decision when you purchase coverage.
If you’ve been injured in a wreck, it is to your advantage to call the attorneys who understand insurance, and get advice. Call or email us today.