In the U.S. there are approximately 682,000 hit and run accidents every year. Not only can these be deadly, but they can be incredibly costly if your insurance isn’t designed to help in just those situations.
Every state in the U.S. handles insurance differently. They each have their own set of laws, rules, and regulations that you and your insurance company must abide by.
Whether you’re moving to a new state or purchasing auto insurance for the first time, there are some things you need to know about how your state handles the industry.
In North Carolina, one of those laws states that all insurance companies in the state that offer auto insurance must include uninsured/underinsured motorist coverage (UM/UIM).
So what are UM/UIM coverages and why does your state require that you carry them? This article delves into these options and how they might affect you or your loved ones.
Uninsured/Underinsured Motorist Coverage
Most states require auto liability insurance. In fact, only New Hampshire doesn’t. That means that a legal driver must carry insurance that covers any damage caused in an accident that was your fault.
If you rear-end the vehicle in front of you, your liability coverage pays for the repairs on that vehicle. They do this so nobody is stuck with a repair bill for something they didn’t do.
The reality is, though that not all drivers abide by the law. There are uninsured motorists all over the country driving without that coverage. There are also millions of drivers that carry the bare minimum liability insurance required.
All of that means that if you are in an accident, there is a chance you will be looking at either repair or medical bills whether the incident was your fault or not. That is where uninsured/underinsured motorist insurance comes in to save the day.
This first type of supplemental insurance is designed for a couple of important situations. The first are accidents caused by a driver and that driver is driving illegally without insurance. The others are hit-and-run situations.
When the at-fault driver does not have the required liability insurance, you involved could be looking at big repair and medical bills. This coverage is designed to unburden you. It will kick in and pay when there is no other option available.
When there is no accounting for the at-fault driver in an accident because they have fled the scene, UM can save you, again. With an at-fault insurance policy to pay the bills, your property, and your family’s health could rely on this coverage.
The difference between uninsured and underinsured motorist coverage is that when the at-fault driver in your accident does have insurance, payouts start there. Unfortunately, minimum policy options just fall short sometimes.
When those policies reach tier liability limit and you are still left with unpaid hospital or repair bills, underinsured motorist coverage kicks in and picks up the slack.
Depending on your own coverage, there is always the chance that some of those bills still stay uncovered. But when you are looking at thousands of dollars of damages, every little bit helps.
The Bottom Line
Both types of coverages are designed to help you when there are no other options. They are safety nets built to compensate for the irresponsibility some of the other drives on the road can and show.
While it can be annoying to pay for extra insurance packages like UM/UIM coverage each month, they can be lifesavers if the need arises. Some states only offer these coverages as an option, but North Carolina deemed it necessary to protect everyone against such irresponsibility.
What About Your Health Insurance?
This type of coverage is intended to be used to pay medical bills after an accident that can’t be covered by another policy. Some people might advise that you don’t need UM/UIM coverage if you have good health insurance protection.
While it is true that health insurance can also cover any medical bills sustained in an accident with an uninsured driver, it does so differently. Unless you’ve previously met your health insurance deductible, you may be looking at significant out-of-pocket expenses.
Often health coverage requires office copays even if you have met your deductible. UM/UIM coverage, on the other hand, will cover your medical bills without any out of pocket spending on your part.
In North Carolina, UM/UIM coverage is required. Now that you know what it is and how it works for you, hopefully, you understand a little about why itis required.
Insurance Can Be Confusing
While insurance differs from state to state, one thing is consistent across the country: insurance is confusing. Between the myriad of options, jargon, and pages and pages of legalese that comes with your policy paperwork, it can be overwhelming.
When you know what your insurance covers, how it does so, and why it can be easier to make decisions about coverage options and at least a little easier to pay that monthly premium.
Get the Help You Need
It is important to know what coverages you have available to you and in what situations they may kick in. Uninsured/underinsured motorist coverage is just one example of the various policy complexities.
Find a trusted agent that can help walk you through your options, your coverage packages, and how insurance works where you are.
Head over to our website to learn more about how your coverage works. Start the free quote process, and see how we can help you make the most of your insurance coverage.