Automobile Insurance Coverages

The at-fault driver’s insurance:

Liability Coverage

  • Pays for bodily injury and property damage for which any covered individual becomes legally responsibleThere are separate limits of liability per person injured and limits of liability per accident. For example, you may have limits of 30/60. This means that your policy would pay up to a maximum of $30,000 to any one person injured by a covered driver or up to $60,000 for all injured parties combined, as a result of a single accident.

What if my injuries exceed the liability coverage of the at-fault driver’s policy?
What if the at-fault driver didn’t have insurance?

What if there were several people injured in the accident and my injuries alone exceed the at fault driver’s policy limit? If all of the injured parties must split the policy limit ($60,000 in the example above), I won’t even get enough money to pay for my medical bills.

Answer: Your attorney will look to your insurance policy for any additional applicable coverages (examples: see below).

My insurance:

Uninsured/Underinsured Motorists (UM/UIM) Coverage

Uninsured (UM) Coverage – provides protection when an uninsured driver, who is at fault, injures you or another covered individual. It also provides property damage coverage.

Underinsured (UIM) Coverage – provides protection when an underinsured driver, who is at fault, injures you or another covered individual and does not have enough coverage to cover the losses of the injured parties.

Medpay Coverage

  • Pays for reasonable and necessary medical and funeral expenses due to an automobile accident
  • Covers you or any family member while occupying any automobile, or as a pedestrian when struck by a motor vehicle
  • Also covers any other person while occupying your covered automobile or any vehicle driven by you or a family member
  • Pays up to the limits listed on your policy for each individual injured
  • Does not provide coverage if the injuries occur while occupying a motorized vehicle with less than four wheels


There are certain reasons your company may cancel your coverage:

  1. Non payment of premium
  2. You are no longer a resident of North Carolina and are not eligible for a policy through the reinsurance facility
  3. The insurance company terminates its contract with your insured agent
  4. Your premium finance company cancels the policy according to the finance contract
  5. If you knowingly make a material misrepresentation of the years of driving experience or of the driving record of you or any other driver who lives with you and uses your covered automobile

Can my company refuse to renew my policy because of claims that were not my fault?

Answer: Many companies will use the frequency of claims, taking into account at-fault as well as fault-free claims, as one of their criteria.

Does an insurance company have to tell me why it cancelled my policy?

Answer: Yes, a company must give the reason(s) why your policy was cancelled and the date termination is effective.

My attorney is asking for information on my insurance policy but I don’t want to file a claim against my company because they might raise my rates or refuse to renew my policy. Any advice?

Answer: An insurance company cannot charge insurance points for an accident that was not your fault.

Property Damage to your Automobile

If your car can be repaired:

The insurance company is responsible for the cost to repair your vehicle. This does not necessarily mean the estimated amount by a repair facility you choose. If the company can have the same repairs completed at a lower cost from another shop, you may be required to pay the difference.

No insurance company can require the use of after-market parts in the repair of your vehicle unless the part is equal to the original part in terms of fit, quality, performance and warranty. You can choose not to have after-market parts placed on your car but you may be responsible for any additional cost.

The insurance company may deduct for depreciation when they allow for an entire paint job or when such items as tires and batteries are replaced. Depreciation is the decrease in value of the vehicle or part because of age or wear and tear.

If your car must be totaled:

If the damage to your vehicle is equal to or exceeds the total cost of repair or if the damage exceeds 75% of the pre-accident actual cash value (ACV), the insurer must consider your vehicle a total loss. When your car is totaled, the insurance company is responsible for its ACV. ACV represents the local market value of your totaled vehicle.

There are two methods to determine ACV/local market value:

  1. By using the local market price of a comparable vehicle; or
  2. If no comparable vehicle can be located, dollar estimates from at least two qualified dealers within the local market area are normally used

If I am in an accident and am not at fault, do I get a rental car while mine is being fixed?

Answer: It is common practice for insurance companies to allow a rental vehicle while your car is being repaired. However, they are not required by law to do so.

The insurance company wants to total my car but I want to fix it. What can I do?

Answer: You have the right to keep the salvaged vehicle but if you do, the insurance company will deduct the salvage value from the ACV.

How long can a company take to pay my claim?

Answer: After receiving a claim, an insurance company has 30 days to pay the claim, make an offer, deny the claim or advise that they’re investigating the claim.

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