You’ve likely heard of uninsured/underinsured motorist coverage as part of your North Carolina auto insurance policy. If you live in North Carolina, it’s a requirement. Because the two forms of coverage are often lumped together, many drivers think they’re the same thing. In fact, they’re two separate forms of auto insurance coverage that work similarly.
Here’s what you need to know.
Uninsured Motorist Coverage
Regardless of state requirements to purchase auto insurance, one out of every eight drivers do not carry coverage. Uninsured motorist coverage pays the expenses — property damage and/or bodily injury — when you’re in an accident with a driver who is declared at-fault but has no insurance. Alternatively, drivers with auto insurance but less than the state-mandated liability limit may also be considered uninsured which will allow uninsured motorist coverage to pay expenses after an accident.
Two types of uninsured coverage are available.
Uninsured Motorist Bodily Injury (UMBI): This coverage pays the medical bills for people protected on your policy after an accident. Some coverage may also pay for lost income and pain and suffering.
Uninsured Motorist Property Damage (UMPD): This coverage pays for property damage done by a driver without insurance. It can cover pedestrians who are hit by a driver, as well as while you’re in your vehicle. Not all accidents with hit-and-run drivers are covered, so check your policy, but all accidents with an identifiable driver are.
As with your standard liability coverage, the policy limits you select for uninsured motorist coverage are important. You need enough to pay for the full cost of an accident, so you’re not hit with out-of-pocket expenses.
Underinsured Motorist Coverage
Many, many more drivers are underinsured than uninsured. These drivers are willing to purchase auto insurance but to cut costs or for other reasons, they carry far less than they need to cover an accident. Their insurance will pay for expenses when they’re at-fault in an accident, but only up to their coverage limit.
Underinsured motorist coverage takes care of what’s left over. It pays for the expenses of your accident after the other driver’s coverage pays out. This keeps you from only receiving part of what you’re due or paying out of pocket for repairs or medical bills. Again, like other parts of your auto insurance, your policy limits are important. You need enough coverage to take care of yourself in any kind of auto accident.
Both uninsured and underinsured motorist coverages are important for any driver. If you have questions about your policy limits or you need a quote for a new auto insurance policy, contact Charlotte Insurance today.