- How Does Auto Insurance Work?
- How To File an Insurance Claim Against the Other Driver
- How Is Fault Determined In A Car Accident?
- What Does No-Fault Insurance Mean
- Dealing with Auto Insurance After An Accident? Help is Available!
How Does Auto Insurance Work?
In North Carolina, you have to purchase a minimum amount of insurance to get on the road. Many people driving around you have this minimal policy and it may look something like this:
In insurance, this is called a declarations page or dec page. Here’s what that means:
Part A
Under part A you have liability for bodily injury and there you’ll see 2 numbers.
Bodily Injury Liability Coverage
1: Each Person
The first number is the most an insurance company will pay to any one person who is injured in a crash. That means, if this person hits you and causes you to lose a leg, $30,000 is all the insurance company will pay for your injury.
“WHAT? That’s crazy!”
Yes. It is.
The best way to protect yourself is to purchase underinsured motorist coverage and I will explain that below.
2: Each Occurrence
The second number is $60,000.00. That is the most an insurance company will pay, no matter how many people are injured. So, if this person hits an 8-passenger church van and badly hurts 8 people, those 8 people will have to figure out how to divide up $60,000.00.
Part B
Property Damage Coverage
The next part of part A is property damage. That means no matter how many stop signs, light poles, fences, guard rails, or cars are “injured” in the crash, the most this policy will pay out is $25,000. If you are driving around in a $40,000 truck and get hit by this person, good luck getting compensated for your truck.
Yet another reason to buy some protection for yourself with an underinsured motorist policy.
Part C
Uninsured Motorist Bodily Injury Coverage
The next type of coverage you see on this dec page above is uninsured motorist bodily injury. If this person is hit by someone with no coverage, their coverage will kick in and supply the minimum limits* to compensate them in a crash.
*Minimum limits mean the minimum amount of liability insurance required for a car by the motor vehicle financial responsibility and/or insurance laws of the state in which you reside, as shown in our records.
The other coverages listed, comprehensive, collision, towing, and rental, are all optional coverage. Sometimes a policy that looks like this is called by the misnomer “full coverage.” The problem with that term is it makes it sound like you have good insurance–and you sort of do–in that you have “some” insurance for a lot of different things that could happen, but you don’t have “a lot” of insurance in any instance.
How Auto Insurance Is Applied
Now that we know how to read a dec page, let’s talk about what order the insurance goes in. The following is the order in which insurance policies come into play:
- The at-fault vehicle’s liability coverage.
- If the driver doesn’t own the vehicle, the driver may have another liability coverage policy that comes next.
- If you were in someone else’s car, we will check their coverage to see if there is any underinsured motorist coverage.
- We will check your underinsured motorist coverage.
- We will check household family members for underinsured motorist coverage you may be entitled to.
To understand how auto insurance works, you should know that your case has to use up all insurance in one policy before moving on to the next. It is also important to note that various policies may get credits, or offsets, for payments made by the policies before it. If you are in a situation where you are dealing with multiple policies and multiple injured people, you are almost always better off having a lawyer taking care of these things for you. There are a lot of land mines and red tape that can really damage your case if you’re not careful.
Understanding How Underinsured Motorist Insurance Works
Below is a dec page that includes underinsured motorist coverage.
As you can see, on this policy the liability limits are $50,000 for each person and $100,000 for each accident. So this is the next step up from the bare minimum.
If this person got hit by someone carrying the bare minimum, and their claim was worth more than $30,000, you can see they have $50,000 in coverage under part C2, so they have another pot of money to tap into if they get hurt.
Their policy will get credit for the initial $30,000 paid out, but then there will be $20,000 of additional money that they wouldn’t have been able to collect if they also had a minimum policy.
That is why your own insurance is really the best protection against a financially devastating crash. You cannot control how much insurance anyone else purchases, but you can control how much insurance is available if you get hurt by having a good solid policy of your own.
How To File an Insurance Claim Against the Other Driver
Now that we’ve talked about how auto insurance works, let’s talk about how to use it after a crash.
On your crash report or your exchange of information, you should be given a carrier and a policy number. Google the carrier’s claims phone number and call it to set up the claim. Be prepared to give a brief explanation of what happened, information about your car, and preliminary information about your injuries.
DO NOT GIVE A RECORDED STATEMENT!
There is no need for them to have a recorded statement to get the claim up and running. Just tell them you don’t feel comfortable being recorded and that should stop the issue in its tracks. If they insist, hang up and call us.
PRO TIP: When giving them information, be brief. Say less. Less than that. Even less. Okay, now you’ve got it.
How Is Fault Determined In A Car Accident?
I would love to tell you there is an easy answer to this, but there’s not.
Typically if the police are called, they will assign fault using the crash report. That can often be definitive when pursuing an injury claim. However, a carrier still may try to deny a claim if their insuree tells them something different happened compared to the crash report.
Also, even if the officer squarely puts fault on the other person, the insurance company may try to use other factors to put even 1% fault on you to get out of paying the claim.
For example, did you know that if your light turns green, and you proceed through the intersection, and are hit by someone running a red light the insurance company can technically try to blame you?
Crazy, right?
They can say, “Well you have an obligation to clear the intersection before entering it, why didn’t you see that fool blowing through the red light?”
It’s wild.
While the crash report is often the deciding factor, keep in mind the insurance company can ultimately deny the case any time they want. If they do, the only thing that can force them to change their decision is a jury finding their driver at fault. If you think you are experiencing a bulls*&t denial, please call us. It’s free for us to review it and could end up giving you your claim back.
What Does No-Fault Insurance Mean
No-fault insurance is a type of coverage that pays out no matter who is at fault for the crash. North Carolina is NOT a no-fault state. Or to remove the double negative, North Carolina is a “fault state.” As a result, you will only be dealing with no-fault coverage if your crash happened somewhere else.
There is one exception–medical payment coverage (MedPay). You or the person you were riding with may have medical payment coverage on their auto policy. Medical payments are a form of no-fault insurance because they will pay out no matter who is at fault for the crash. Also, MedPay coverage is pretty cheap and I usually advise people to have a policy equal to their insurance deductible to help offset expenses if they end up hurt in a crash.
Dealing with Auto Insurance After An Accident? Help is Available!
Trying to understand how auto insurance works can be a maze of confusing terms, policies, and red tape—especially when you’re trying to recover from a crash. The truth is, the system isn’t always on your side. Insurance companies are in the business of paying as little as possible, and without the right coverage (or someone on your side who knows the ropes), you could end up stuck with bills you shouldn’t have to pay.
The good news? You don’t have to handle this alone. If you’re dealing with a denied claim, confusing policy rules, or an insurance adjuster pushing you around, call us. We’ve been through this dance a thousand times, and we know how to push back and get results.
Oh, and did I mention? The call is free. You’ve got nothing to lose by getting some advice—and a lot to gain.
