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North Carolina Supreme Court Destroys Coverage Stacking Rights for Injury Victims

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For decades, the law has been well settled in our state on the issue of how Underinsured Motorist (UIM) coverage applies for crash victims. For a very long time, UIM coverage has been stackable coverage, meaning that a seriously injured collision victim can look to multiple UIM policies to collect benefits for medical costs, lost wages and for pain and suffering. Under the old law, a crash victim would have valid claims for UIM benefits if the total coverage limit of all applicable UIM policies exceeded the at-fault driver’s liability coverage limits.

Bodily injury liability coverage is mandatory in North Carolina, but the current amount of legally required coverage is just $30,000.00 per-person (for all policies issued on and after January 1, 2025, this limit increases to $50,000.00). Under the law that existed before the recent Supreme Court decision, if a victim is injured by a driver who only has $30,000.00 in coverage, the victim could look to all of the following car insurance policies and add the per-person coverage limits for UIM to determine the total amount they can collect for their injury claims:

  • the vehicle they are riding in when the crash occurred (even if they are riding with the at- fault driver)
  •  their own personal auto policy (if different from the policy on the involved vehicle)
  • all other auto insurance policies for every “resident relative” – anyone who resides with the crash victim on the crash date who is related to the victim by blood or marriage

Understanding UIM Coverage: A Scenario Analysis

Consider this hypothetical – Mary is riding with a friend when they were struck by a driver who ran a red light. The at-fault driver has $50,000.00 per person in bodily injury liability coverage. Mary’s friend has $50,000.00 in UIM coverage, Mary has her own car insurance with $100,000.00 in UIM, and Mary’s mother who lives with her has $250,000.00 in UIM coverage. Under the law that was in place before the recent Supreme Court decision in N.C. Farm Bureau Mutual Ins. Co. v. Hebert, Mary could collect $50,000.00 from the at-fault driver’s liability coverage, and another $350,000.00 from the multiple UIM policies that applied for her. The UIM on Mary’s friends policy is added to Mary’s coverage AND Mary’s mother’s coverage. Mary would be eligible for $400,000.00 of available coverage to fund her injury claims.

Supreme Court Ruling Alters UIM Coverage Landscape: Implications for Accident Victims

Our Supreme Court changed this law and held that THERE IS NO UIM CLAIM AND NO STACKING UNLESS THERE IS UIM COVERAGE ON THE VEHICLE THE VICTIM WAS RIDING IN! For Mary, her friend had $50,000.00 in UIM coverage, which is the same amount of coverage on the at-fault driver’s liability policy. A driver is now considered “underinsured” only if their liability policy is less than the UIM coverage on the vehicle that the victim is riding in. This changes our state’s law which has been followed by all insurance carriers for a very long time. Many accident victims have lost their right to apply and use their own coverage. The sad truth is this will only impact collision victims with severe injuries, victims who have the most valuable claims due to the severity of their injuries and financial losses.

This new law completely destroys the rights of collision victims who are injured while riding as a guest passenger with the at-fault driver. Under the old law, the UIM coverage on the at-fault vehicle was always stackable with the victim’s personal coverage and family/resident-relative coverage. All applicable policies paid their limits in full if the injuries warranted payout of all available coverage. Guest passengers in the at-fault vehicle could stack UIM coverage in every case! After the Supreme Court decision in N.C. Farm Bureau Mut. Ins. Co. v. Hebert, guest passengers in the at-fault vehicle can never collect from their own coverage or from their family policies. This is because the UIM limits would always match the liability limits since the coverages are issued on the same policy.

We regret seeing our laws restrict the rights of crash victims. North Carolina already has the most stringent negligence law in the country. Our state follows the law of “pure contributory negligence”. Under this law, if a driver is just slightly at fault, even just 1% responsible for causing their collision and injuries, they have NO claims. Thus, a driver who is 99% responsible for causing a severe accident owes nothing to the victim. We should see fewer obstacles to fair payment for injury claims for collision victims, but our Supreme Court has taken a step in the other direction. Insurance companies win because they can now deny coverage in high-value injury cases, and crash victims are left unable to use coverage that they paid for.

Choose Our Dedicated Car Accident Lawyers to Represent You

A dedicated car accident lawyer in Raleigh, like Carl Nagle, serves as a beacon of support and expertise for clients navigating the aftermath of a collision. With his deep understanding of state laws and legal processes, he provides invaluable guidance from the moment a client seeks his assistance. Carl meticulously investigates the circumstances surrounding the accident, gathering evidence and interviewing witnesses to build a strong case. Reach our to our Raleigh car accident lawyer today for help.