By Roy L. McDonald, II, Attorney at Law
Motor vehicle accidents (MVAs) cause more than 30,000 deaths each year and are a top ten cause of death among people aged 1-54. In 2017, a total of 275,067 MVAs occurred on North Carolina roadways, an increase of 9,000 from the previous year. A total of 81,865 North Carolina MVAs resulted in an injury and 1,297 resulted in a fatality.
The average economic cost of a non-fatal disabling injury in a MVA is $61,600.00. The average economic cost of a death resulting from a MVA is $1,130,000. The average cost of a new car is $36,718.00. A fully loaded 2020 Chevrolet Tahoe 4WD Premier Plus retails for more than $75,000.00.
Not having enough automobile insurance could cause you to have personal financial responsibility for your own or someone else’s bodily injury or property damage after a MVA, so it is important that you have the right kind and the right amount of automobile insurance coverage.
Liability Coverage
Liability coverage protects you if you cause a MVA. It is divided into bodily injury coverage and property damage coverage.
Bodily injury coverage is separated into per person and per accident limits. You are legally required to carry a minimum of $30,000.00 per person/$60,000.00 per accident in bodily injury coverage. This means that if you have only the required minimum amount of bodily injury coverage and cause a MVA your policy will pay no more than $30,000.00 to each person injured. This also means that if more than one person is injured, your policy will pay no more than $60,000.00 among all the people injured. These limits apply no matter how serious the MVA, how severe the injuries, or how expensive the medical care.
You are required to carry at least $25,000.00 in property damage coverage. This means that if you have only the required minimum amount of property damage coverage and cause an MVA, your policy will pay no more than $25,000.00 to repair damaged vehicles or in fair market value for total loss vehicles. This limit applies no matter how many vehicles were involved, the total cost to repair each damaged vehicle, or the fair market value of each total loss vehicle.
We strongly recommend that you have, at the very least, $100,000/$300,000 in liability bodily injury coverage and $100,000 in liability property damage coverage.
Uninsured Motorist Coverage
Uninsured motorist (UM) coverage protects you from drivers who do not have insurance. If you suffer bodily injury or property damage in a MVA caused by a driver without insurance, your UM coverage will compensate you for your bodily injuries and property damage up to the policy limits.
UM coverage is divided into bodily injury coverage and property damage coverage and has limits, just like liability coverage.
We strongly recommend that you have, at the very least, $100,000/$300,000 in UM bodily injury coverage.
Underinsured Motorist Coverage
Underinsured motorist (UIM) coverage protects you from drivers who do not have enough insurance to fully compensate you. If you suffer bodily injury or property damage in a MVA caused by a driver who does not have enough coverage to compensate you for your bodily injuries and property damage, your UIM coverage will cover the difference up to the policy limits.
UIM coverage is divided into bodily injury coverage and property damage coverage and has limits, just like liability coverage.
We strongly recommend that you have, at the very least, $100,000/$300,000 in UIM bodily injury coverage.
Medical Payments Coverage
Medical payments coverage protects you from medical expenses incurred as a result of an MVA, no matter who is at fault.
Medical payments coverage limits are per-person, meaning each injured person will have coverage for medical expenses up to the coverage limit.
We recommend you have at least $5,000.00 in medical payments coverage.
Conclusion
More than likely, you probably do not have enough automobile insurance. The good news is that this is easily fixed. Consider your risks. Contact your agent. Discuss what kinds of coverage and coverage limits are right for you. The cost of appropriate coverage is probably not as high as you think, and you will be glad to have it if you find yourself in a situation where more is actually better!