When most people think about buying car insurance in North Carolina, it often boils down to simply looking at the different offered sticker prices on various polices offered by the major car insurance companies. The problem is humans are hard-wired not to consider the long-term potential harms that come from mistakes in purchasing car insurance coverage. We focus on the short-term squeeze on the wallet from the premium, and our general annoyance that North Carolina requires insurance on every vehicle on the road.
When the unthinkable happens and you or a family member are injured or even killed in a motor vehicle accident, the question of car insurance suddenly because a serious consideration. Unfortunately, insurance coverage is set in stone at the time of the accident, and if there’s insufficient coverage at the time of the accident, there’s no possible way to fix it after the fact.
There’s little I hate more than sitting down with a family and explaining that there is insufficient insurance coverage to compensate them for serious injuries that happened in a car or truck accident. Often this lack of coverage comes as a surprise–everyone believes they’re carrying good insurance coverage, and don’t realize how their insurance policy is actually written.
If there’s one thing I’d like to accomplish today, it is to educate just one person on the major mistakes that can occur when purchasing car insurance coverage, so that one more person can be adequately protected from financial catastrophe in the event of a serious car crash.
The Myth of Full Coverage
When I meet with a new car accident client, I will always ask them how much insurance they’re carrying on their own vehicle. Often the answer is “full coverage.” Full coverage is language that’s thrown around by insurance agents, but the reality is that it’s meaningless fluff that doesn’t actually tell you anything about how much insurance coverage you have in reality.
One agent’s “full coverage” policy may be a minimum liability limits with expanded property damage coverage, while another “full coverage” policy from a different agent may include a significant amount of uninsured and underinsured motorist coverage.
If your agent tells you that you have “full coverage” you should ask the agent to give you a full copy of the insurance policy, and in particular your “Declaration of coverage” page. This will allow you to see exactly what kind of coverage that you have, and I’ll break down the different types of necessary coverage below.
Failing to Carry Underinsured Motorist Coverage
In North Carolina, the government requires that you carry at least $30,000 per person, and $60,000 per accident of liability coverage. This coverage only applies if the accident is your fault, and someone else was hurt as a result of your negligence. Liability coverage will not pay for your injuries if someone else was at fault.
North Carolina also requires motorists to carry $30,000 of uninsured motorist coverage. This insurance policy only applies if the other driver did not have insurance, or if it was a hit-and-run and the other driver is never identified. We routinely handle these sorts of claims.
Uninsured motorist coverage will not provide any payments to you if the other driver has insurance, even if the other driver only has the state minimum of $30,000.
If the negligent driver does not have enough insurance, they are also unlikely to have significant assets that you can collect against to pay for your medical bills and pain and suffering. Underinsured motorist insurance is therefore your only real option.
Underinsured motorist coverage will provide compensation for your or your loved one in the event that you are injured by a driver who is not carrying enough insurance coverage. Given the meteoric rise of medical bills, that $30,000 minimum coverage looks smaller by the day. You should always carry underinsured coverage of at least $100,000, but my suggestion is to carry at least $300,000 in underinsured motorist coverage.
The additional premium on underinsured coverage is modest, and the peace of mind knowing that your hospital bills will be taken care of in the event that someone else isn’t careful and hurts you is immense.
Failure to Carry Medical Payments Coverage
Medical payments coverage, also known as “med pay,” is a special type of insurance coverage that’s called “no fault” coverage. What this means is the medical payments will be available for any accident, regardless of who caused the accident.
Medical payments coverage covers, as the name suggests, medical bills. It does not apply to pay or suffering, lost wages, or other types of compensation that you may be able to recover under a liability policy or underinsured motorist policy. All you have to do is send in a copy of the bill to your insurance company, and they will either pay the bill or reimburse your payment, up to the limit of the medical payments coverage.
I suggest you carry $5,000 of medical payments coverage. This is usually sufficient to cover an ambulance ride, emergency room visit, and any x-rays or other imaging that needs to be done. It may still be possible to recover the money a second time from an applicable liability insurance policy as well, which can result in a larger total recovery for the harms that you suffered.
Failure to Carry Umbrella Insurance
While less important than the previous categories, if you have significant personal assets, such as a business or multiple properties, it is in your best interest to ask your insurance company about umbrella insurance coverage. This coverage will kick in if a claim against you exceeds your liability insurance limits. It also generally covers a wider range of activities, including potential liability claims that do not involve the use of a motor vehicle.
Perhaps of most importance, this is also some of the cheapest insurance you can buy per dollar of additional coverage. This will protect you if you accidently make a mistake on the road, and provide any injured people a policy they can collect against to get back on their feet. It’s a win-win for everyone involved (except for perhaps the insurance company!)
If you’ve been injured in an accident of any type please do not hesitate to contact one of the lawyers at Melrose Law at (828) 452 – 3141. We offer free consultations for injured clients, and you do not owe us a fee if we do not make a recovery on your behalf.