There’s broken glass on the asphalt; the light of emergency vehicles flickers in the darkness. A baby cries in the crumpled car next to you as cars crawl past the accident, and drivers turn their heads to steal a glance of the scene.
You grab your insurance card from the glovebox along with your driver’s license and exhale a breath of relief. This is exactly why you have car insurance, right?
If this scene stresses you out, imagine going through it in real life.
What Does Your North Carolina Insurance Policy Cover?
Car insurance is something most of us have; but few people understand the basics of their policies. You may think you’re fully covered, only to realize after an accident that you’re not.
Read each section below to decode your insurance policy and shore up your financial future.
North Carolina Insurance Requirements
In North Carolina, all drivers are required to have liability coverage and uninsured motorist coverage.
Liability is broken up into three parts: bodily injury liability, property damage liability, and supplementary payments.
- Bodily injury liability covers other people’s injuries when you or another covered driver cause an accident (e.g. medical or funeral expenses, lost wages, disability, pain and suffering, etc.).
- Property damage liability covers damages to other people’s property when you or another covered driver cause the damage (e.g. repair or actual cash value of another’s automobile, property damage, and related legal expenses).
- Supplementary payments cover miscellaneous expenses in addition to stated limits of liability (e.g. bail bonds, loss of earnings related to hearings or trials, and other expenses incurred at the insurance company’s request).
On your policy, liability coverage will have separate limits of liability per person injured and limits of liability per accident. This is often referred to as split limits.
The minimum liability coverage limits in North Carolina are:
- $30,000 for bodily injury liability, per person per accident.
- $60,000 of bodily injury liability total per accident.
- $25,000 of property damage liability, per accident.
Here’s a real-life example: Let’s say you’ve got liability coverage with split limits of 100/300/50. This means your policy pays up to a maximum of $100,000 to any one person injured by a covered driver, or up to $300,000 for all injured parties combined resulting from a single accident. If there was any property damage, this policy would pay up to $50,000 in property damages for each accident.
But what if you only have minimum liability coverage?
This is where some people run into trouble. If your policy only covers up to $30,000 for bodily injury liability, that might not be enough to pay all related medical expenses following an accident if you’re at fault.
If you’re at fault, there are a few things an injured party can do:
- The injured party can file a claim with their car insurance carrier (who will seek repayment from YOUR insurer).
- The injured party can file a personal injury lawsuit against YOU; or
- The injured party can pursue a third-party claim directly with YOUR insurance company.
Thirty-thousand dollars may sound like a lot of money, but medical expenses, lost wages, and pain and suffering add up quickly.
Is minimum liability coverage enough in North Carolina?
The short answer is, yes; however, you should review your policy to see how it stacks up to other types of coverage (see chart below); there are important considerations you should make.
For example, if you own an older car, don’t own a home, or rarely drive, minimum liability is likely the best option for you.
Middle-income earners usually need more liability coverage on their policy. If you own a home, collect art and fine jewelry, or have a good-paying job, you may be questioned for choosing to drive with minimum coverage in North Carolina.
High-income earners should definitely up their liability coverage. You may not think you’re rich, but if you’re responsible for the accident the injured party’s attorney will view your assets as a means to recuperate any loss and then some if you drive with minimum coverage.
Liability insurance DOES NOT cover damages to YOUR automobile.
If you’re not responsible for the accident, the other person’s liability insurance covers bodily injury and property damage according to the limits of their policy.
In a case where the driver doesn’t have car insurance, required uninsured motorist coverage kicks in. It covers bodily injury as well as property damages with fixed limits. It’s estimated that 9.1 percent of North Carolina motorists are driving uninsured.
Miscellaneous Automobile Coverage in North Carolina
North Carolina insurance also includes optional coverages. The two most popular are collision and comprehensive.
- Collision: covers physical damage to your covered vehicle and covers the lesser of the cost of repair or actual cash value of your car.
- Comprehensive: this is also called other than collision coverage, and it includes cost of repair or actual cash value of your vehicle minus any deductibles. Comprehensive covers a wide range of damages:
- Missiles or falling objects—no kidding!
- Theft or vandalism
- Hail, water, floods, and much more
Other types of miscellaneous coverages can be purchased and added to your policy. Some of the coverages available in North Carolina include:
- Medical Payments Coverage – this expands medical coverage for you and eligible family members
- Automobile Death Indemnity/Specific Liability – provides a benefit for death, dismemberment, specific disabilities, and total disability resulting from an accident
- Miscellaneous Vehicle – covers motorcycles, golf carts, travel trailers, and other eligible vehicles
- Rental Insurance – helps cover rental costs for you and eligible family members for up to 22 consecutive days
- Customizing Equipment Coverage – covers specialty furnishings and custom equipment like car audio/visual systems and other electronic accessories
- Towing and Labor – pays for towing and labor costs each time a covered automobile or any non-owned auto is disabled (road-side assistance)
- Extended Transportation/Rental Reimbursement – covers the cost (up to a certain amount) of transportation expenses incurred by you or loss of use expenses for a non-owned vehicle for which you become legally responsible
A Comparative Look at North Carolina Car Insurance Types
Use the table below to compare different types of required and optional car insurance available in North Carolina.
|What does it pay for?||Who (or what) is covered?||Is it required in North Carolina?|
|Liability||Bodily injury and property damage for which a covered driver becomes legally liable.||You and your family, or anyone driving your covered automobile with permission.||Yes; state law requires minimum limits.|
|Collision||Damage to your covered automobile.||Your covered automobile or non-owned automobile.||No; may be required by lender.|
|Comprehensive||Damage to your covered automobile, caused by: missiles or falling objects, fire, theft or larceny, explosion or earthquake, windstorm, hail, water or flood, malicious mischief or civil commotion, contact with a bird or animal or breakage of glass.||Your covered automobile or non-owned automobile.||No; may be required by lender.|
|Medical Payment||Necessary and reasonable medical and funeral costs.||You and your family, or anyone occupying your covered automobile.||No|
|Uninsured/Underinsured Motorist||Uninsured Motorist Coverage: Bodily injury and property damage.|
Underinsured Motorist Coverage: Bodily injury only.
|You and your family, or anyone occupying your covered automobile.||Yes; auto insurance policies with the minimum Bodily Injury and Property Damage limits are required to include Uninsured Motorist Coverage.|
Policies with limits greater than the minimum must provide combined Uninsured/Underinsured Motorists coverage.
DeMayo Law Offices, L.L.P. have seen thousands of cases that start like the scene at the beginning of this article. And people from all over, including Charlotte, Hickory, Monroe, Raleigh-Durham, Greensboro, High Point, Winston-Salem, Greenville, New Bern and Washington look to our injury professionals for guidance and relief during the turbulent period following a serious car accident in North Carolina.