PROTECT YO NECK!
North Carolina is a “liability” state, meaning that drivers must have liability insurance to legally operate a motor vehicle on the streets and highways of our fair state. Liability insurance pays out, theoretically, for the losses caused by your negligent operation of a motor vehicle. This works out, in general.
But, as with all systems, there are gaps.
The main gap in our liability system is that NC minimum liability insurance is $30,000. That means someone could run you over and chop off both of your legs and the most you’d likely ever see from them is a whopping $30,000.
How do you protect against that kind of catastrophic loss?
First, you should have health insurance. I know, it’s not cheap. Believe me, I personally pay for 4 people and get no help with that. BUT it’s worth it! Your health insurance should cover what might be the biggest part of your loss – health care expenses – AND unless you have an unusual policy, they shouldn’t have any right to dip into your liability award.
Second, you should have as much UNINSURED/UNDERINSURED MOTORIST COVERAGE as possible. That coverage, which you have on your auto policy, will help cover you in a situation where there is no liability insurance, or there isn’t enough to cover your losses. Of course, it has limits, too, which is why I say you should get as much as you can. Here’s an example:
Fred runs me over and chops off my legs. Fred has $30,000 in coverage. I have $100,000 in UIM (underinsured) coverage. That means I can get $30,000 from Fred’s carrier AND $70,000 from mine, for a total amount of my UIM coverage of $100,000. If in that scenario, Fred had NO coverage, then I could use my UM (uninsured) coverage up to $100,000 from my own carrier. What happens between Fred and my carrier afterward is another story.
Third, heaven forfend that you die in an auto accident, but it can happen. Given that the survival rate for all of us is 0% on a long enough timeline, you should have life insurance. If Fred killed me in one of the above examples, my estate should be able to get up to my UM/UIM limits AND my life insurance would pay out to the beneficiaries, too.
It would be great if everyone had $1 million or more in coverage, but the reality is they don’t. The moral of the story is that you should do your best to insure yourself against these sorts of losses by getting as much coverage for all eventualities as you can. Do it.
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