NORTH CAROLINA (QUEEN CITY NEWS) — Effective Jan. 1, 2025, North Carolina will increase its minimum auto insurance coverage requirements, bringing its already high minimum coverage requirements, some of the highest in the country, in line with several other states.
The bill, passed last year, would allow accident victims to collect more compensation from those at fault by raising the minimum amount of liability insurance drivers are required to have.
Currently, North Carolina drivers are required to carry liability insurance that covers up to $60,000 per accident, $25,000 per person for property damage, and $30,000 for bodily injury.
If a driver causes an accident and the damages exceed the amount that insurance can cover, the accident victim may be able to have the driver's assets seized.
The new law increases minimum liability coverage to $50,000 for property damage and $50,000 for bodily injury, up to a maximum of $100,000 per accident.
There's been no official announcement as to how these changes will affect consumers' insurance premiums, but drivers will likely see an increase in premiums in the new year.
“Your premiums will go up, but it's a small amount compared to the additional protection you get. If you get into an accident, your protection increases significantly. It pays out $50,000 for property damage and covers most vehicle claims,” said personal injury lawyer Carl Nagel.
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The legislation also changes how underinsured motorist coverage (UIM) is paid.
UIM is required in North Carolina and provides protection to victims when the driver responsible for an accident does not have enough insurance to cover all damages.
The way coverage is currently set up, insurance companies can “offset” payments, paying only the difference between the victim’s UIM coverage and the at-fault driver’s liability coverage.
For example, let’s say a driver has $100,000 in UIM coverage and is the victim of an accident that results in $100,000 in medical expenses. In this scenario, the driver who caused the accident only has $50,000 in personal injury liability coverage.
Under current law, the victim’s UIM insurance must only pay the difference between the maximum coverage amount and the amount paid by the negligent party. In this example, the UIM insurance would pay $50,000 and the negligent party would pay $50,000, meaning the victim would receive a total of $100,000.
The new law eliminates that liability offset and allows victims to collect the full face amount of their UIM insurance. In the example above, the victim would receive the full $100,000 of their UIM insurance plus $50,000 from the at-fault driver, for a total of $150,000.