Types of North Carolina Automobile Insurance Policies


By statute, most North Carolina automobile insurance policies in North Carolina are relatively standardized.  N.C.G.S. § 20-279.21 provides the minimum types and amounts of coverage that must be offered and/or provided.  Other coverages, such as medical payments coverage, and additional amounts of coverage are optional.  When a car, truck, or motorcycle collision causes injuries, there are at least four different types of injury coverage that may apply.  Those coverages include:

(1)    Liability Coverage:          Along with property damage coverage, this is the primary insurance coverage that most people know may be included in an automobile insurance policy.  Liability coverage protects you in the event that you cause an injury to another party in a collision or are alleged to have caused an injury.  Under this coverage, your insurer must provide you an attorney and pay any judgment up to the amount of the coverage (unless an exclusion applies).  For example, assume that you negligently fail to yield for a stop sign and cause a T-bone collision that results in the driver of the other car sustaining a broken leg.  He or she will likely present a claim to your insurance company.  Your insurer will either (a) settle the claim within your policy limits (b) deny the claim completely or (c) fail to reach a mutually agreeable settlement with the claimant.  If either (b) or (c) occurs, the matter will likely proceed to litigation.  If the plaintiff wins a judgment within your policy limits, the insurer will pay the entire judgment and the matter is probably concluded.  If, however, the judgment exceeds your policy limits, the insurer will pay up to the limits and you will become responsible for the remainder.

(2)    Medical Payments Coverage:    This coverage is optional and is a type of “no-fault” insurance.  If anyone (including you) is injured in your vehicle during a collision, and he or she has medical expenses, they can be reimbursed for those expenses up to the amount of coverage.

(3)    Uninsured Motorist Coverage:  “UM” coverage applies primarily in two situations.  First, uninsured coverage applies if you are injured through no fault of your own by another motorist who has not purchased insurance or whose insurance has lapsed.  In that situation, you can sue the at-fault driver and your own insurer will be responsible for damages up to the amount of your UM insurance limit, which is usually the same as your liability limit.  The minimum in North Carolina is $30,000.00 but is often sold in other amounts also, including $50,000.00, $100,000.00, and $300,000.00.  You may also just negotiate directly with your insurer prior to filing suit.  UM coverage further protects you in the event you are injured due to a hit and run driver.  As long as there is “physical contact,” you can proceed against your own policy, whether or not you can identify the other driver.

(4)    Underinsured Motorist Coverage:           “UIM” coverage protects you in the event that you are injured by the negligence of a driver that has less liability coverage than you have UIM coverage.  Assume for example that you own $100,000.00 in underinsured motorist coverage and are injured in a rearend collision by a driver with a $30,000.00 liability policy.  Assume further that you have $65,000.00 in damages, including medical expenses, lost wages, and pain and suffering.  The at-fault party’s insurer is responsible for paying only $30,000.00 of your damages, but you may then proceed against your own policy to recover the remaining $35,000.00.

This is, of course, a simplified overview of North Carolina automobile insurance coverages.  There are any number of  issues and exclusions that could affect an individual situation and your ability to recover.  If you have been injured in an automobile accident, you should set up a free consultation with a personal injury attorney.  The Raleigh law firm of Maginnis Law represents injured North Carolinians across the state.  Our attorneys offer free consultations and will travel to meet with you.  Additionally, because all injury cases are handled on a contingency basis, you pay no attorneys’ fees unless and until we obtain a settlement or verdict.

To discuss your automobile insurance coverage questions, including those involving underinsured and uninsured motorist coverage, with a Maginnis Law attorney, call the firm at 919.480.8526 or use our contact page.  From our Raleigh office we represent clients throughout eastern North Carolina, including Raleigh, Durham, Chapel Hill, Cary, Sanford, Greenville, Greensboro, Apex, Southern Pines, and Fayetteville.