Under the North Carolina Financial Responsibility Act, uninsured motorist (UM) coverage is mandatory and included on all auto policies. If you are struck by a driver who failed to pay insurance premiums to maintain coverage, your claims against the uninsured driver would be covered under your own policy. Under our pure contributory negligence law, you must be entirely innocent of contributory conduct or driver error before you could present any claims against the other driver. This is true regardless of whether the other driver is insured.
If the other driver was not insured, your insurance carrier will defend that driver! In fact, if the claims cannot be settled and a lawsuit must be filed, your insurance company will hire and pay for the lawyer who stands with the uninsured driver in court. The lawyer they pay will argue against you in court and suggest to the jury that you caused your own injuries, that the injury claims are false or exaggerated, and that your injury claims are inflated and unfair. Whenever possible, the lawyer your insurance company hires will try to convince a jury to leave you with a zero verdict following trial.
Immediately after you report a UM claim to your insurance company, they will look closely at the accident facts and seek to blame you for the accident. If you were slightly at fault, they will deny all UM claims. If they do accept legal liability and agree that the uninsured driver caused your accident, they will still challenge the validity and value of all injury claims. It is vital to understand that the UM adjuster’s goal is to minimize your injury claim payments. You should not trust them to simply volunteer fair payment for your accident claims. Even though you are presenting claims through your own policy, the UM context places you in direct conflict with your insurance carrier.
Two important points should be considered by the UM claimant. First, pushing your insurance carrier for proper and maximum payment would not cause any increase in your auto insurance premiums. They cannot drop your coverage or raise your rates. Thus, you should not be dissuaded from enforcing your rights to fair compensation. Second, in an injury claim against your uninsured motorist coverage, the adjusters represent the at-fault driver exclusively. They will contest all your injury claims, and they will diplomatically pull you toward a discounted settlement. Be prepared to stand your ground.
If the at-fault driver failed to carry insurance, he or she will regret this in the long run. Your insurance carrier retains the legal right to sue that driver and recoup whatever they pay under your UM coverage. As soon as the UM claims are paid and settled, your insurance company will “subrogate” against the uninsured driver. Subrogation means to stand in the shoes of another, and here it means that the UM carrier holds your rights against the uninsured driver. Thus, the law allows them to collect what they pay from the driver who caused your accident. They will first contact that driver and seek a private payment agreement, and if the uninsured driver refuses, your insurance carrier can suspend the uninsured driver’s license privilege. If this is not enough to bring the uninsured driver to the table, your insurance company will pay a lawyer to sue the uninsured driver and secure an enforceable judgment. Their goal is to recoup everything they pay out from the driver who violated our mandatory insurance laws.
Your UM insurance carrier protects you after the accident, but they then protect themselves by pursuing the driver who failed to carry liability insurance. Since they have strong legal rights, you should not feel sorry for your insurance company when they are pushed to pay full value for all accident claims. Protect yourself and insist on full and fair payment of all accident claims. If the UM carrier fails to offer a proper settlement, you should continue to fight until you are properly paid.
Most UM claims settle. However, if the adjuster fails to offer a fair settlement, you should continue through the trial process. Fortunately, North Carolina UM law provides an option to the victim who cannot reach a settlement with the adjuster. If the UM claimant does not receive an acceptable settlement offer, he or she can choose a typical jury trial or can instead elect to have the case decided through private arbitration.
Arbitration is a simple proceeding conducted by a three-judge panel. It is a private trial with binding results. The victim and the insurance carrier each pick their own preferred arbitrator. The third arbitrator must be picked by mutual agreement of the parties’ preferred arbitrators. The insurer and the victim split the total cost of the arbitration. With all three judges’ charges, an arbitration typically costs $1,500.00 to $3,000.00, which, while expensive, is far less than the costs involved in a typical jury trial. Again, these costs are split between the victim and the UM insurance carrier. The rules of trial evidence apply, and the arbitration is essentially a mini-trial where the evidence is presented to the arbitration panel in a private setting. The arbitrators then determine the value of the case, and their case resolution and damage award is binding on the parties.
Uninsured motorist coverage is stackable in North Carolina. Please see chapter 1 for a more detailed discussion of stacking rights and the procedure involved to properly collect benefits from multiple UM policies. Simply put, the victim of an uninsured driver can use several policies concurrently and collect from these multiple sources. Settlement must be made with all applicable policies and insurance carriers simultaneously. If you settle with one policy without sweeping in anotheroutside source, the first settlement closes all claims and forfeits your rights under outside policies. The victim of an uninsured driver can collect from all of the following policies:
- the auto policy on the vehicle involved in the collision;
- all outside personal auto policies held by the victim and showing the victim as a named insured; and
- any other motor vehicle insurance policy held by any person related by blood or marriage to the victim who resided with the victim on the collision date.
Please remember that insurance carriers always seek to minimize their own financial exposure. In significant injury cases, competent counsel is recommended to ensure that the UM carrier respects the threat of litigation, understands all essential medical evidence, finds and applies all available UM policies, and pays full value for all medical expenses, lost wages, pain, suffering, scarring, disfigurement, and lost quality of life.