I will never forget the first time I renewed my car insurance after I finished law school. Going to law school I was a typical poor student. My approach to car insurance was to get as little and spend as little money on insurance as possible. I did not want to pay for any extra bells and whistles; I just wanted to be legal. Many people take this approach. Underinsured coverage always felt like something I didn’t need because I did not understand it. Only at the end of law school at the beginning of my legal career handling car accident cases did I come to appreciate the importance of underinsured motorist coverage. I want to address how underinsured motorist coverage applies in car accident cases. Uninsured motorist coverage is a different type of coverage and will be discussed in another blog.
Underinsured coverage only comes into play when the driver who caused the accident does not have enough insurance. For example, you could easily be involved in an accident with a driver that does not have enough insurance. In North Carolina, the mandatory minimum amount of liability insurance is $30,000 per person/$60,000 per accident. This means that in minimum coverage insurance situations, an at-fault driver has $30,000 payable to any one person, and $60,000 in coverage payable on any one accident, regardless of the number of injured claimants. In South Carolina, it’s even less: $25,000 per person and $50,000 per accident. If another driver with minimum limits fails to slow down and hits you hard in the rear, you will likely have EMS expenses, emergency room bills, doctors’ bills and physical therapy. If you have an MRI or CT scan, and then consider your pain and suffering, your claim is very likely to exceed the minimum coverage available. If the at-fault driver doesn’t have enough car insurance to cover your claim, the next place you have to look is your own underinsured coverage.