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Car accidents in North Carolina are rarely easy to handle on one’s own. Even an accident that seems as if it should be a straight-forward, easy matter to work out may involve unexpected twists. This is especially true when it comes to car insurance, health insurance, and other types of insurance that might effect your claim.  

North Carolina car accident attorney different types of insurance policies

Ellis Law created this page to explain the different types of insurance that may be involved in your potential car accident claim. Below you will find the answers to the following commonly asked questions about insurance and car accident claims in NC:

  • What are the types of insurances often involved in a North Carolina car accident claim? 
  • What do they cover? 
  • Do you have to pay an insurance company back if they pay something on your behalf?
  • What’s a lien? 
  • What does North Carolina law say about subrogation? 

Ellis Law provides the answers to these questions as an educational resource. This page does not constitute and should not be taken as legal advice. If you have questions about your North Carolina car accident claim, schedule your free, no obligation consultation with Ellis Law. Our firm is devoted to passionately representing accident victims.

Let’s get started.

Liability Insurance: State Minimum & Car Accidents in North Carolina

All drivers in North Carolina must have car insurance. The most basic type that is required by North Carolina law is known as liability coverage. With liability insurance only, the person who owns the vehicle only has a certain amount of coverage to pay for the injuries and property damage to the other party or parties when their vehicle is involved in an accident. 

Drivers must carry a minimum of $30,000 in coverage per person and $60,000 per accident. However, a change in the law is coming on January 1, 2025 that requires drivers to carry $50,000 in coverage per person and $100,000 per accident. According to a 2021 study done by the National Safety Council (NSC), the average cost for non-disabling injuries related to car accidents in the U.S. is just under $30,000 and the initial average costs of disabling injuries are over $150,000. These statistics are worth considering when you shop for car insurance. Also consider the current prices of both new and pre-owned cars and the costs of repair. It’s imperative that drivers have the proper amount of liability coverage to pay the ever-increasing costs associated with healthcare and to repair or replace their vehicle or other property. 

When shopping for car insurance, we recommended comparing the difference in pricing for 30/60, 50/100/, and 100/300 coverage. Depending on your driving history, it’s usually not too much more for the higher coverage policies, which will better protect you and your family in the event you are involved in a car accident.

What happens, though, if the driver who hit you had no insurance or didn’t have enough insurance? Hopefully you purchased adequate uninsured and underinsured motorist coverage when you bought your insurance policy. If you’re not familiar with uninsured or underinsured motorist coverage, read on to learn how this type of insurance can protect you if you’re involved in a serious car accident.

Uninsured/Underinsured Motorist Coverage (UM/UIM)

Uninsured/underinsured motorist coverage, or UM/UIM, is secondary insurance coverage you can opt to buy when you purchase your car insurance. Every liability policy sold in North Carolina includes at least $30,000 in uninsured (UM) coverage, but hopefully you elected to increase that amount when you purchased your policy.  It’s relatively inexpensive, but it can be a financial lifesaver if you’re hit by someone who doesn’t have insurance. In the unfortunate event that you’re involved in an accident where the at-fault driver does not have insurance, or if the driver flees the scene before insurance information can be exchanged, you can file a claim under your UM coverage with your own insurance company.

If the other driver doesn’t have enough insurance to cover your losses, but you chose to purchase UIM (underinsured motorist coverage), and your policy offers more UIM coverage than the at-fault party’s liability policy, your UIM coverage comes into play and your insurance carrier is required to cover the difference between the other driver’s liability coverage limits up to the limits of your UIM coverage. 

For example, if the at-fault driver only had $30,000 in liability coverage, you purchased $100,000 in UIM coverage, but your accident related damages total over $100,000, the liability carrier pays the limits of their coverage and your UIM carrier pays the difference between the liability coverage ($30,000) and the limits of your UIM coverage ($100,000), which is $70,000. 

However, there are specific notice requirements set by statute that must be met when pursuing a UIM claim. On top of that, insurance carriers often deny coverage based on limited or incorrect information they have collected during the claims handling process. There may also be other UIM policies in your household which might provide additional coverage that can be “stacked” on top of your own personal policy or the policy for the vehicle you were a passenger in. That’s why it’s always in your best interest to contact a seasoned personal injury attorney who knows how to navigate UIM claims if you believe you have a UIM claim.

Med Pay

Medical Payments Coverage, also referred to as Med Pay, is another type of insurance commonly used in North Carolina car accidents. Med Pay is considered first party coverage. If you elect to purchase Med Pay coverage, it can be used to pay some or all of your medical expenses related to the accident regardless of who is determined to be at fault. 

The amount paid by the Med Pay insurance carrier for your bills depends on many factors.  Before the carrier agrees to pay out on a Med Pay claim, the insured is required to provide copies of the medical bills incurred as a result of a motor vehicle collision. In North Carolina, we typically see Med Pay coverage in amounts of $1000, $2000, $5000, although these amounts can be much more. If you’re not sure whether you have Med Pay coverage on your policy, you should check with your auto insurance carrier, and if you do not have it, it’s worth adding this additional coverage. It is not expensive and can greatly help cover your medical bills if you’re injured in an accident.

Health Insurance

Many people think that if they’re involved in a car accident they don’t have to use or shouldn’t use their health insurance, especially if they weren’t at fault. The truth is that if you’re hurt, you should use your health insurance to help cover expenses regardless of who is at fault. This is true regardless of whether you have a private health insurance policy or if you’re on Medicaid or Medicare. 

Using your health insurance will allow you to get the treatment you need for your injuries. Who will ultimately pay the remainder of what insurance doesn’t cover can be determined as your claim goes forward. 

Worker’s Compensation

If you were involved in a car accident while you were on-the-job, another form of insurance that may be involved is worker’s compensation. When someone is hurt while they were working, they should file a claim with their employer’s worker’s compensation insurance. This can help ensure employees get the medical care they need and potentially receive at least part of their pay while they are unable to work. 

Do You Have to Repay the Insurance Company?

If you’ve been involved in a North Carolina car accident, various types of insurance may come into play and you may be left wondering, do I have to repay all these insurance companies?

The answer to this important question is that it depends. If you use your Med Pay or UM/UIM coverage, you do not need to repay the insurance company. These are additional coverages on your policy that you pay for every month for this reason. Third party liability insurance coverage also doesn’t require repayment. 

Health insurance and worker’s compensation insurance may have provisions that require some or all of what the insurance carrier paid out be repaid or “reimbursed” when the claim is settled or litigated. This is one of the issues involved in North Carolina personal injury law that may become complicated, especially if you try to handle your own claim. 

What Is a Claim of Lien in North Carolina?

A claim of lien in North Carolina is a written legal instrument that may be filed or simply noticed in writing by a medical care provider or hospital, or by another person or entity that was involved in giving some sort of care or professional services related to the accident. At its simplest, a claim of lien may be filed against someone or something a person owns. You may have heard about liens in the context of real property—if a lien is filed against a home (real property), the person or entity holding the lien must be paid in full if the house is sold. If the lien is not paid, the home cannot be sold. 

Many medical providers and facilities may provide you with notice of a lien against the proceeds of your settlement to help ensure that they are paid for the services they gave you. Ignoring a valid lien can have serious legal consequences. If you were injured in an accident, received medical treatment for your injuries, and have received a notice of a lien from a medical provider (or any other entity), you should contact an experienced personal injury attorney.

What Is Subrogation?

In the context of personal injury law, subrogation is a legal right used by insurance companies to pursue a third party for the losses the company incurred as a result of payments it made on behalf of its insured for injuries which were the result of a covered accident or injury.

In essence, subrogation allows the insurance company to step into the shoes of their insured  – the injured victim who has a legal right to recover from the third party – and seek reimbursement for monies it paid out on behalf of its insured. 

For example, if Driver A was rear-ended by Driver B on the highway, Driver B is the at-fault, third party who is legally responsible for Driver A’s damages. However, if Driver A has collision coverage on his vehicle, Driver A can direct his insurance company to handle the property damage claim and pay for the repairs to his vehicle.  Once the car is fixed, Driver A’s insurance company will then subrogate the claim and seek reimbursement from Driver’s B’s insurance company.  

The same thing may also occur with other types of insurance like health insurance or short-term disability insurance.  For example, let’s say you have Blue Cross Blue Shield insurance through your job and the Plan agrees to pay for the medical care you received as a result of injuries caused by a third party. After a few weeks, the Plan sends you a letter and notifies you it has a right of subrogation and intends to seek reimbursement for claims it paid out on your behalf in the event you receive a third party settlement or verdict at trial.  

North Carolina’s Anti-subrogation Rule – 11 NCAC 12.0319

In North Carolina, subrogation isn’t always available for health insurance companies. In fact, the North Carolina anti subrogation rule explicitly provides that life, accident, or health insurance may not be subrogated.  However, the Rule does not apply to certain government funded health insurance plans like Medicare and Medicaid.  It also does not apply to certain private health insurance plans that are organized under a federal law known as The Employee Retirement Income Security Act of 1974 (ERISA).

In North Carolina, whether a Health Insurance Plan does in fact have a right to be reimbursed is a complicated legal question which requires a detailed investigation and thorough legal analysis. An experienced North Carolina personal injury attorney can best advise you on whether subrogation might apply in your case. If you have questions about subrogation and how it might apply to your personal injury claim, contact our office today. 

Questions about North Carolina Car Accidents & Insurance? Ellis Law Wants to Help

North Carolina car accident claims may seem straight-forward to resolve at first glance, but when more than one insurance company gets involved, it may cause complex legal issues to arise. Ellis Law’s dedicated personal injury lawyer is here to help. Our team has the knowledge, experience, and the necessary skills to help you understand your potential claim and successfully settle or litigate it for you. Ready to learn more? Schedule your free consultation now.

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My practice focuses exclusively on personal injury law, including cases involving motor vehicle collisions, wrongful death, and catastrophic injuries. I understand the difficulties and stresses an accident and injury can place on a person’s life and I work hard every day to ensure my clients are fairly compensated for their losses.

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