How Do the New Insurance Laws Affect Auto Accident Claims in Durham?

Many people are not aware of the new auto insurance laws that affect drivers in Durham. In fact, many people do not fully understand how the previously-enacted insurance laws in North Carolina can affect a claim for compensation after a car accident.

When you work with the right personal injury lawyer in a car crash case, your attorney will know the insurance laws and can anticipate the ways they could affect the outcome of your case. For background, we can provide general explanations here, but if you contact our legal team for a free consultation, we can provide specific information about how the laws could affect your case.

Overview of Insurance Laws

Almost every state in the U.S. requires the owner of a car or truck to purchase liability insurance. This insurance provides funds to pay for injuries and property damage that is caused by someone driving the at fault vehicle. Insurance coverage generally applies to a vehicle rather than a particular driver. If you own a vehicle and purchase coverage, and you give someone else permission to drive it, your insurance should apply even if you weren’t driving. If the driver has their own insurance for a different vehicle, that insurance is likely to provide secondary coverage.

The required liability coverage pays for damage and injuries your vehicle causes to others. If you want insurance coverage to pay for damage to your own vehicle or pay your own medical bills, those are additional types of coverage. Collision coverage pays for damage to your own vehicle resulting from a crash, and comprehensive coverage pays for damage caused in other ways, such as storms, fires, or vandalism. Drivers who want coverage to pay their own medical bills in case of an accident can purchase optional MedPay coverage. These types of coverage may protect you even if an accident was your own fault.

Finally, there is insurance that covers you if you are in a collision caused by someone else who doesn’t have appropriate auto insurance. This is known as uninsured or underinsured motorist coverage, often referred to as “UIM.”

Recent Changes to Auto Insurance Laws

In North Carolina, amendments to auto insurance laws took effect in July of this year, changing insurance requirements. It is important to understand how the changes affect accident claims.

Coverage Requirements Have Increased

Like other states, North Carolina not only requires vehicles to be covered by liability insurance but also specifies the minimum coverage required. Until recently, vehicle owners had to have policies that paid up to $30,000 to someone injured by the vehicle, but that amount has now increased to $50,000. If an accident injured two or more people, the old limits required vehicle owners to have policies that would pay $60,000 in total to everyone injured. Now, the amount of coverage required per accident is $100,000.

Coverage limits for property damage also increased. The old requirements specified that coverage must pay for $25,000 in damage to vehicles or other property. Under the new requirements, policies must cover $50,000 in property damage.

These changes mean that if you are in a collision caused by a driver with appropriate insurance, there may be more resources available to cover your losses. If your losses amount to more than what is covered by the at-fault driver’s insurance, your attorney may still seek the full amount, and it may be possible to recover it through secondary insurance or from the property of the vehicle owner. Many people choose to protect themselves from personal liability by purchasing coverage above the required minimum.

Uninsured and Underinsured Motorist Coverage is Now Required

In the past, policyholders could decide whether to pay for uninsured/underinsured motorist coverage as part of their insurance package, but they could obtain it only if they had purchased coverage above the minimum. Now, UIM coverage is required for all policies in North Carolina, and the way this insurance operates has changed as well. UIM coverage limits are set for the same amounts as a driver’s liability coverage.

Uninsured motorist coverage provides protection in situations where the at-fault driver has no insurance, while underinsured motorist coverage fills in the gaps when a driver’s insurance doesn’t provide enough to meet the losses caused by the accident.

Changes in the law eliminate the set-off that formerly applied and allow accident victims to stack coverage. To see how the changes work, consider an example in which the at-fault driver has $50,000 in coverage but the victim’s injuries, including medical bills, lost wages, and pain and suffering, are determined to be $100,000. The driver’s $50,000 in liability coverage pays the first $50,000 of the victim’s damages, and then the victim’s underinsured motorist coverage would provide the remaining $50,000. 

Under the old legal scheme, the $50,000 of coverage from the at-fault driver would be offset against the victim’s UIM coverage. If the victim had the minimum UIM coverage of $50,000, the offset would effectively erase that coverage. Now, the coverages can be combined so that the full amount of losses is covered by insurance.

Other Changes in North Carolina Auto Insurance Laws

The changes that took effect this year cover numerous other issues as well. However, most of these changes affect the direct costs drivers expend to operate vehicles rather than amounts available to help those involved in accidents.

For instance, insurance companies can charge a new-driver surcharge for 8 years instead of 3. In addition, the lookback period is increased for certain offenses, such as speeding less than ten miles per hour above the posted limit, and the surcharge for certain traffic violations can now continue for five years instead of three. Hopefully, these changes will encourage safe driving and reduce the number of collisions.

Martin & Jones Helps Car Accident Victims Recover When Insurance Issues Get Complex

Insurance can be both helpful and horrible for victims of car accidents in Durham. It is helpful because insurance can provide the resources accident victims need to cover their medical needs, lost wages, and other losses, and to meet future needs. Without insurance, drivers might not have the financial means to pay for the harm they cause through negligent actions.

However, because insurance companies are focused on making money, their objective is to avoid paying claims even when the policies should provide full coverage for losses. Working with an experienced attorney at Martin & Jones is one of the easiest ways to protect your rights when you are dealing with insurance companies.

For a free consultation to discuss the recovery options available through insurance after an accident, call Martin & Jones at 800-662-1234 or contact our team online now.