Author: David J. Ventura, Trial Attorney
Crumley Roberts, LLP
Under North Carolina Law, all registered motor vehicles must be insured by an automobile liability policy that carries a minimum of $30,000.00 of bodily injury liability insurance. If you are injured in an accident through no fault of your own and someone else is at fault, their liability insurance pays you for your medical expenses, lost earnings, and physical injury caused by a negligent driver. Unfortunately, a significant percentage of drivers across the country drive without the required liability insurance. This puts us all at risk of being injured by an uninsured driver who will not be able to pay for the harm caused by their negligent driving.
For instance, in North Carolina, the percentage of uninsured drivers on the road in 2012 was 9.1%. This compares with 7.7% for South Carolina, 10.1 % for Virginia, and 20.1 % for Tennessee.(Source:InsuranceResearchCouncil). In 2012 alone, uninsured drivers caused $2.6 billion in personal injury damages. (Source: Insurance Journal, “IRC: Uninsured Motorists a Perplexing, Pervasive Concern”, by Don Jergler).
In fact, most uninsured drivers cite a lack of money as the reason they did not buy the required bodily injury liability insurance. (Source: The Pew Charitable Trusts, “States Look To Reduce Ranks of Uninsured Drivers”, by Teresa Wiltz). This means that those uninsured drivers are not likely to have the financial ability to pay you for all the damage they caused. One way to protect yourself is to buy Uninsured and Underinsured Motorist Coverage from your own insurance company when you insure your car, truck, or van.
So what is Uninsured and Underinsured Motorist Coverage? They are two types of automobile insurance designed to protect you if an uninsured or underinsured driver negligently causes a wreck. Uninsured Motorist Coverage protects you when you are hit by a driver who has no liability insurance at all. In that situation, your own automobile insurance company pays your damages after you prove the uninsured driver was at fault.
Underinsured Motorist Coverage applies to a situation where you are hit by a driver who has liability insurance, but not enough to pay for all of the damage and harm caused to you. With Underinsured Motorist coverage, once you have collected against all of the liability insurance available from the other driver, your own automobile insurance company pays you for any remaining damage and harm caused by the at-fault driver.
Let me give a realistic example of how this insurance coverage can provide some protection if you are hit by a driver who is not insured. Mary is the mother of three elementary school children who works part-time while her kids are in school. Each day she finishes work before school lets out so she can pick her kids up from school. This allows her time to help with their homework, take them to after-school activities, make dinner, and get them to bed. Her husband Ron works a full-time job during the day and a part-time job at night so Mary won't need to work full-time until the kids are older. As with most folks, finances are tight.
Life was going on as usual for Mary, Ron, and the kids until the day a young male driver crossed Mary's path. It happened two years ago. Mary had picked up the kids from school and was taking them to a friend's birthday party. The weather was clear and it was a beautiful sunny day. The kids were so excited about the party. Sadly, they never made it to the party that day. Mary was driving down Maple Street about a mile from the birthday party when a young male driver ran a red light and broad-sided the minivan holding Mary and the kids. Miraculously, the kids were only shaken up and frightened. Thankfully, they were not seriously hurt.
Mary was not as lucky. Mary's left leg was broken in two places, requiring surgery to insert a steel rod. She also sustained a concussion and multiple cuts and bruises from the shattered driver's window. Mary's medical bills totaled $25,000.00 and she missed three months of work, losing $3,000.00 in wages. Mary and Ron didn't have health insurance or any disability coverage to pay for these losses. After recovering from surgery, Mary contacted her insurance company to inquire about the young male driver and learned that his liability insurance policy had been canceled for non-payment of premiums only two months prior to the wreck. Despite this, he kept driving around town with no liability insurance. Mary and Ron were out of luck. Two years later, they're still dealing with the medical debt from Mary's injuries. They think about filing for bankruptcy. The whole situation has put a strain on their marriage. Times are tough and stressful. The kids can tell something is wrong with Mom and Dad.
While buying Uninsured Motorist Coverage would not have prevented the wreck, it would have lessened the financial harm suffered by this family. In this example, $50,000.00 in Uninsured Motorist Coverage would have paid for all of Mary's medical bills and would have reimbursed her for her lost earnings. Mary still would have struggled to recover from her physical injuries, but at least the financial harm caused by the uninsured driver would have been lessened.
Now, if we change the facts a little, I can explain how Underinsured Motorist Coverage typically works. Let's imagine that the young male driver carried the minimum required liability insurance of $30,000.00 but that Mary's injuries were more severe and required a one-month hospital stay costing $35,000.00, and let’s say that Mary missed six months of work and had lost earnings of $6,000.00. Under that scenario, Mary's total economic damages would be $41,000.00. The young male driver's liability insurance company would pay Mary $30,000.00, leaving Mary with $11,000.00 in uninsured financial damages. If Mary and Ron had purchased $50,000.00 in Underinsured Motorist Coverage from their own automobile insurance company, Mary would have $20,000 in Underinsured Motorist Coverage available. Once the young male driver's fault was determined, she could get paid $11,000.00 from her own insurance company to cover these uninsured financial losses. Besides financial losses, Uninsured and Underinsured Motorist Coverage also covers physical injuries, pain and suffering, scarring, etc. This simple example illustrates the benefits of Uninsured and Underinsured Motorist Coverage.
To have these protections though, you must purchase this type of insurance from your own automobile insurance company. Depending on your situation, North Carolina automobile insurance companies may charge about $100.00 per year for $50,000.00 in Combined Uninsured and Underinsured Motorist Coverage. That's about $1.92 per week to protect you in case an uninsured or underinsured driver crosses your path. Of course, only you can decide if it's worth the price. As always, drive safely.
And remember, if you ever find yourself in a situation like that of Mary and Ron, give us a call. Crumley Roberts will “Stand Up For You”.
DJ Ventura is a litigation attorney at Crumley Roberts. After graduating from the University at Albany, he received his Juris Doctor from Fordham University School of Law.