UM/UIM Coverage -- Insurance to Protect YOU
Everyone in North Carolina has to have car insurance. It's the law.
February 25, 2011 /24-7PressRelease/ -- Everyone in North Carolina has to have car insurance. It's the law. But the law only requires motorists to carry the bare minimum in liability coverage -- $30,000 bodily injury per person per accident, $60,000 total per accident and $25,000 for property damage, or 30/60/25. In serious accidents causing severe injuries, these minimum coverages are unlikely to provide sufficient financial compensation to cover all of your medical expenses and other losses -- and this is assuming you are in an accident caused by a driver who has insurance.
What happens when you are in an accident with a driver who doesn't have insurance or not enough insurance?
In these cases, you can collect benefits from your uninsured-underinsured motorist (UM/UIM) policy. Unlike liability insurance, UM/UIM insurance is meant to protect you:
- UM (Uninsured Coverage): provides coverage when you are involved in an accident with a driver who does not have any car insurance or in cases when you are involved in a hit-and-run. A UM policy provides coverage for losses such as lost wages, medical expenses, pain and suffering, and permanent injury.
- UIM (Underinsured Coverage): provides coverage when you are involved in an accident with a driver who does not have enough insurance to pay for your medical expenses, lost wages, pain and suffering, and permanent injury. UIM policies only provide coverage for bodily injury.
In January 2009, a new law went into effect requiring North Carolina motorists to carry UM/UIM coverage as part of their auto insurance policies. The law provides that drivers must have a UM/UIM policy in an amount at least equal to the minimum liability requirements -- 30/60/25. The maximum amount of coverage that can be purchased is $1 million. While you have the option of selecting how much UM/UIM coverage you want, if you do not make a selection then you automatically will receive UM/UIM coverage limits equal to the highest amount of liability coverage for any one vehicle under your policy.
Purchase as Much UM/UIM Coverage as Possible
As with liability coverage, you should not be lulled into believing that carrying the bare minimum UM/UIM coverage will be enough to protect you if you are in a car accident. Rather, you should purchase as much coverage as you can reasonably afford to ensure that you have sufficient protection if you are in a motor vehicle accident causing catastrophic injuries.
Compared to other types of auto insurance, UM/UIM coverage is affordable and relatively cheap. On average, it is estimated to account for approximately only 10% of a driver's total car insurance premium. You should consider purchasing a UM/UIM policy with a $1 million per person, per accident limit, if you can afford to do so.
You also should keep in mind that your car insurance policy protects everyone in the vehicle at the time of the accident, which may include passengers without health insurance. Also, keep in mind that this coverage insures you and family members of your household if they are injured in someone else's vehicle. This coverage follows the person and not the vehicle.
Moreover, the risk of being in an accident with an uninsured driver is quite high. Recent studies have shown that in down economies, drivers tend to decrease their auto insurance coverage or if not drop it altogether. According to the Insurance Research Council, over 16% of drivers nationally do not have auto insurance. In North Carolina, the estimates are somewhat lower at 12%, but these rates still pose an unacceptably high risk that the driver who hits you will be uninsured.
Stacking UM/UIM Insurance
North Carolina is one of several states that allows you to stack your insurance coverage. Stacking means that you are able to collect benefits from more than one insurance policy for losses resulting from a single accident. For example, say you have two vehicles, each with a separate UM/UIM policy providing 100/300/50 coverage. If you are in accident with an uninsured driver and have $200,000 in losses, by stacking your UM/UIM coverage you can collect $100,000 from each of the polices -- for a total of $200,000.
Conclusion
In a tough economy, you want to save money any way you can, but this should not include decreasing your insurance coverage. While there is nothing you can do to influence another driver's actions, including carrying car insurance, you can take complete control over your own actions. Purchasing a sufficient UM/UIM policy is a relatively inexpensive way to provide the protection you and your family need should you be involved in a car accident.
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