Current Status of Underinsured and Uninsured Motorists Laws in North Carolina

May 15 , 2024

At the Ramsay Law Firm, P.A., our Charlotte personal injury attorneys reported in 2023 that in addition to an increase in minimum liability insurance coverage requirements, Senate Bill 452 (SB 452) would also change how Uninsured Motorist (UM) and Underinsured Motorist (UIM) insurance coverage applies after a North Carolina vehicle collision.

SB 452 was signed into law on October 3, 2023.

NC Current Status of Underinsured and Uninsured Motorists Laws

What Changes Were Implemented Through North Carolina SB 452?

SB 452 raises the minimum insurance liability limits for the first time in North Carolina since 1999, helping to protect people involved in car accidents on our state roadways.

For the past few decades, the minimum required automobile liability insurance limits in North Carolina have remained at $30,000 per person, $60,000 per accident, and $25,000 for property damage. The minimum limits have been increased to $50,000 per person, $100,000 per accident, and $50,000 for property damage. While SB 452 has been signed into law, the rate changes will apply to all policies and renewals issued on or after January 1, 2025.

Another notable change introduced by SB 452 is the elimination of the Underinsured Motorist Insurance (UIM) credit for payments made by the liability insurer. Previously, UIM insurers could reduce benefits based on what the liability insurer had paid.

Under the new law, UIM carriers will no longer receive any credit from their coverage for the payments made by the liability insurer. This change ensures that individuals who have responsibly purchased UIM coverage will receive the full benefits, regardless of any payments made by the liability insurer. This change will also apply to UIM claims on policies and policy renewals issued on or after January 1, 2025.

How Many People Drive Uninsured or Underinsured in North Carolina and Why?

According to the Insurance Information Institute, 10.4% of North Carolina drivers are uninsured. This poses a considerable risk for all road users and underscores the importance of the upcoming changes in insurance laws.

Some of the most common reasons individuals drive without insurance include, but are not limited to:

  • Financial difficulties or economic hardship can lead to prioritizing other expenses over insurance payments.
  • Insurance policies can lapse if payments are missed intentionally or due to oversight.
  • Drivers classified as high-risk due to previous accidents or traffic violations often face significantly higher premiums. To avoid these costs, some may choose to drive without insurance.
  • Drivers may underestimate the likelihood of being involved in an accident or caught by authorities, leading them to forego insurance.
  • Vehicles that are not correctly registered or are illegally registered may not be insured. Drivers of such vehicles may avoid obtaining insurance due to the illegal status of their vehicle.

If you have been injured in a vehicle collision caused by a negligent uninsured, underinsured, or hit-and-run driver in North Carolina, our dedicated Mecklenburg County personal injury law firm provides free consultations to all injury victims by calling 704-376-1616 or contacting us online. We can help you understand how pursuing your insurance coverage for your complete damages may be possible.

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