Every driver in North Carolina is required to have an insurance policy that meets certain requirements. The minimum values required by law, however, are not always enough to make you whole. One of the most essential aspects of insurance was only recently made mandatory by law. Underinsured motorist (UIM) coverage covers your losses when an at-fault driver has insufficient insurance of their own. Especially in more severe crashes, when expenses pile up, the North Carolina minimum liability coverage is far from enough. In this article, we’ll discuss UIM coverage and how it works in the event of an accident.
Overview
The specifics vary by state, but you must purchase liability and uninsured motorist (UM) coverage in North Carolina.
Liability
Liability insurance previously followed the 30/60/25 rule. As of July 1st, 2025, North Carolina updated the state’s insurance minimums to 50/100/50. That means:
- $50,000 for bodily injury to one person
- $100,000 for bodily injury to two or more people
- $50,000 for property damage
You will first turn to this liability coverage to cover accident-related expenses in a personal injury claim. The at-fault driver’s insurer is responsible for determining the appropriate amount based on the facts of the accident. However, in the event of a more severe crash, these figures are far too low to compensate for the devastation.
For example, consider you were involved in an accident where an at-fault driver hit your car and injured three people inside. The most you can get from their insurance policy is $100,000, split among all of you. It is unlikely that the minimum amounts available from the at-fault driver’s insurance will be sufficient.
Uninsured Coverage
Although required by law, the Insurance Information Institute estimates that 13% of drivers nationwide do not have an active insurance policy. For this reason, drivers must also purchase uninsured motorist coverage in cases where an at-fault driver has no assets. The minimum requirements for UM insurance reflect the liability claim minimums. As of July 2025, the requirement for uninsured coverage was combined with Underinsured (UM) coverage.
Underinsured Coverage
As of July 1, 2025, North Carolina mandates underinsured motorist (UIM) coverage for all new and renewed auto liability policies. This coverage must meet or surpass the state’s updated minimum liability limits of $50,000 per person, $100,000 per accident, and $50,000 for property damage. Previously, UIM coverage was optional, and policies issued under the old minimum limits did not include it.
Imagine a negligent driver causes a severe accident, resulting in your medical bills totaling $35,000, lost wages totaling $ 20,000, and pain and suffering totaling $30,000. All up, you have $85,000 in damages. If the at-fault driver’s liability coverage is only the state minimum of $50,000, that’s the maximum amount their insurer will pay. If you have $100,000 in uninsured/underinsured motorist (UIM) coverage, since the driver’s $50,000 limit is less than your $85,000 damages, you are considered underinsured. Your UIM policy will cover the remaining $35,000 without reducing the amount paid by the at-fault driver’s insurer. Additionally, if you have UIM coverage on multiple policies (such as for another vehicle in your household), stacking rules allow you to combine the highest limits from each policy for your claim.
Company Vehicles
If you are driving a company vehicle at the time of an accident, your employer may also have a UIM policy. Some companies are insured for up to $1,000,000 per vehicle. Their policy is yet another source of compensation you may be able to access in an emergency. It’s important to note that an employer’s UIM coverage is separate from workers’ compensation.
Personal Injury Representation
An attorney can help identify all sources of insurance available to you after an accident. Insurers on all sides frequently offer less than an accident victim needs to heal, and experienced representatives will seek whatever compensation is available.
Reach out to Maginnis Howard for experienced personal injury representation. We have three conveniently located offices across North Carolina in Charlotte, Fayetteville, and Raleigh. Visit our contact page for more information and to schedule a free consultation. We represent clients across the Carolinas on a contingency basis.
