Uninsured/ Underinsured Motorist Coverage (UM/UIM)

This is a two part series giving a basic explanation on Uninsured/ Underinsured Motorist Coverage in North Carolina.


What is UM or UIM?

Uninsured or underinsured motorist coverage can pay for injuries to you and your passengers when there is an accident and the other driver is both legally responsible for the accident and considered "uninsured" or "underinsured." In addition, uninsured and underinsured motorist coverage can pay for injuries to you or any resident relative living in your household, even if your automobile was not involved in the accident.

An uninsured driver is someone who did not have any insurance, had insurance that did not meet state-mandated minimum liability requirements, or was not financially able to pay it. A hit-and-run driver also counts as uninsured as it relates to bodily injury as long as there was an impact with the uninsured vehicle (UMBI). However if you are claiming uninsured motorist property damage, the hit and run driver must be identified before you can recover for uninsured motorist property damage.

An underinsured driver is someone who had insurance but the amount of the insurance was not high enough to pay for the personal injuries or damage caused by the accident. In these situations, UIM can pay you the differences in your underinsured coverage and the at fault automobile liability coverage if your case warrants that amount of damages.


Is It Required?

North Carolina General Statute 20-279.21(b)(3) and (b)(4) requires all licensed drivers to carry Uninsured/Underinsured (UM/UIM) motorist coverage on their insurance policies in an amount at least equal to the highest bodily injury liability coverage on said policy. Unfortunately though if you carry only the minimal liability coverage, you will not likely have UNDERinsured coverage.


Why Would You Want It?

Simply put, you want to be protected. If you get into an accident with someone who is driving without insurance or doesn't have enough of it, you will most likely not get just compensation. With UM/UIM in place, you will have a means to collect damages for your injuries and other expenses incurred.

UM/UIM coverage is usually affordable, especially considering the amount of protection it offers. It could pay your medical bills, lost wages, and pain and suffering. If someone hits you or your car and is legally responsible for the damages, you won't get any money from them if they don't have money to give you. Especially during times when people are struggling economically, many drivers either do not have insurance or do not have enough insurance. If you have UM/UIM, you can get money even if the other driver doesn't have enough.


Next article: How Does UM/UIM Work and How Much Should You Carry?