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UIM/UM Coverage is Now Mandatory for Most

Drivers in North Carolina no longer have the option to select or reject Uninsured Motorist coverage (UM) or Underinsured Motorist coverage (UIM). UM coverage provides insurance coverage when an individual is involved in an accident with a vehicle that does not have insurance. UM insurance provides coverage both for Bodily Injury and Property Damage. North Carolina now requires all drivers to carry both types of UM insurance. UIM coverage provides insurance coverage when an individual is involved in an accident and the other driver does not have enough insurance coverage to pay for all of the person's injuries.

Beginning on January 1, 2009, The North Carolina Financial Responsibility Act as Amended by House Bill 738 requires that all automobile insurance policies in North Carolina have UM coverage and UIM coverage. The 2009 amendments provide the insured with the ability to purchase greater or lesser limits of coverage provided that the UM/UIM bodily injury limits shall not be less than 30/60. Unless the insured purchases greater or lesser limits of coverage the UM/UIM bodily injury limits shall be equal to the highest injury liability limits for any one vehicle insured under the policy. The UM property damage limits shall be equal to the highest property damage liability limits for any one vehicle insured under the policy. The insured may purchase UM property damage that is less than the policy's liability limits for property damage provided that the UM property damage limits may not be less than $25,000 per accident.

Aside from requiring UM /UIM coverage, the Amendment eliminates the Selection/Rejection Form and made changes to section (m) which requires the insurer to provide reasonable notice of the options available to the insured.

The following chart summarizes the coverage requirements and impacts of the new law:

Policy Type UM- Bodily Injury UM- Property Damage UIM
Commercial Fleet and Non Fleet EXEMPT FROM NEW LAW EXEMPT FROM NEW LAW EXEMPT FROM NEW LAW
Non Commercial Fleet EXEMPT FROM NEW LAW EXEMPT FROM NEW LAW EXEMPT FROM NEW LAW
Mixed Fleet New law may apply to those vehicles in the fleet that are non-commercial. New law may apply to those vehicles in the fleet that are non-commercial. New law may apply to those vehicles in the fleet that are non-commercial.
Personal Non Commercial/Non Fleet Unless the driver purchases greater or lesser amounts of coverage then coverage must be equal to highest limits of bodily injury liability for any one vehicle on the insurance policy. A driver may purchase up to $1,000,000 per person/$1,000,000 per accident. Drivers are required to carry N.C. minimum limits of $30,000 per person/$60,000 per accident. Driver must have coverage equal to the highest property damage liability limits for any one vehicle on the policy. Minimum coverage must be $25,000 per accident. Coverage must be equal to the highest limits of bodily injury liability for any one vehicle on the policy. A driver may purchase up to $1,000,000 per person/$1,000,000 per accident. Drivers are required to carry N.C. minimum limits of $30,000 per person/$60,000 per accident.

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Dean & Gibson, PLLC
Cameron Brown Building 301 South McDowell Street, Suite 900 Charlotte, NC 28204
Phone: 704-372-2700