Picture it: you’re driving home from a long day at work. You reach an intersection with a green light when someone on their cell phone runs a red light and T-Bones you. You have suffered some very severe injuries. You must be extracted from your car by the fire department. You’re flown by helicopter to the nearest trauma and spend a month in the hospital. Your medical bills rack up to more than $150,000. You also have a permanent injury and can’t return to your old job or way of life.
The liability insurance for the person that caused the accident becomes the first source of your recovery. Each state sets the minimum amount (“minimum limits” in lawyer-speak) each driver must have to drive. North Carolina’s minimum limit is $30,000. South Carolina’s minimum limit is $25,000.
There are no hard statistics, but (in our experience) the vast majority of drivers carry only the amount required by law. It doesn’t take a math whiz to figure out that a minimum limit policy doesn’t go very far in your situation. This sad scenario is something that we, as injury lawyers, see far too often. There is no worse feeling than telling an injured person that there is no way to get more money for them.
So, how do you avoid being out of money in a serious accident?
You need to add a three-letter acronym to your own car insurance: UIM. UIM stands for under-insured motorist coverage. It is an optional coverage in both North and South Carolina. UIM provides coverage to you if you’re in an accident in which the at-fault driver (the person who caused the accident) doesn’t have enough insurance to pay your bills. UIM covers you as a driver, not just your vehicle. The more UIM you buy, the greater your protection will be in a catastrophic accident.
The law in South Carolina requires an insurance agent to make a “meaningful offer” of UIM coverage. But you should specifically ask for UIM coverage as part of being an informed consumer.
One advantage of UIM is that the amounts available for each car vehicle can be combined (“stacked” in lawyer-speak) to increase your total coverage. So, you’ll have $75,000 in available coverage if you have three vehicles and $25,000 in coverage. You can get coverage in different amounts per vehicle, but keep in mind that your UIM limits are affected by the amount of UIM coverage on the car you’re driving at the time of the accident. For this reason, you should always “max out” your UIM coverage on every vehicle.
People (and insurance agents) sometimes confuse UIM with UM. UM means “uninsured motorist coverage.” UM applies when a person causes an accident without insurance. UM is mandated by both North and South Carolina law. You already have UM if you have liability insurance. The only catch is that you cannot collect both UM and UIM in the same accident. If the at-fault driver is uninsured, then your UM will be the only available coverage. That is another reason to buy liability insurance higher than simply minimum limits: you get higher available coverage for UM.