Underinsured Motorist Coverage and Demanding Arbitration Following Exhaustion of Liability Policy
Underinsured motorist coverage (UIM) is a type of automobile insurance that helps protect you in the unfortunate circumstance where you are injured by a driver with an insufficient liability policy. For example, if you a struck by a driver carrying the North Carolina minimum limits of $30,000.00/$60,000.00, this would mean that you could recover only $30,000.00 from his or her policy. If you had suffered $75,000.00 of damages, a recovery under just this policy would clearly be inadequate. This is where UIM jumps in to act as a safeguard. If you had purchased $100,000.00 of UIM coverage, it would permit you to recover the remaining $45,000.00 of your damages from your own insurance policy.
If you have a valid automobile negligence claim and your case is taken all the way to trial, and a judgment is obtained against the negligent car driver in excess of his liability limits of their car insurance policy, the process of claiming of claiming UIM funds is not that complicated. So long as any UIM insurance carriers were placed on notice of the case, and given an opportunity to participate, they are required to pay their portion of the judgment as provided under the insurance policies and applicable law. However, if you are like most folks, and hope to settle your claim rather than face trial, you should know that the procedure can be difficult and time consuming. Generally, you should not attempt to handle an underinsured motorist coverage claim without the assistance of an attorney.
Your automobile insurance policy most likely allows for a right to binding arbitration as to any dispute involving UIM. This right may be exercised by the injured party when he or she and the UIM carrier disagree as whether there is a right to recover damages from the owner of the uninsured motor vehicle or they do not agree as to the amount of damages that would be recoverable against the uninsured driver. Even before this step, though, there must be an “exhaustion” of any applicable liability insurance policies.
The North Carolina Court of Appeals, in the case Creed v. Smith, recently clarified that exhaustion occurs when there is a tender of liability insurance limits. As a practical matter, this means that your UIM carrier may not cheat you out of the right to arbitration by advancing any funds offered in settlement by the liability carrier. This is what many of the insurance companies were attempting to do before the Creed decision. They hoped to avoid arbitration because they knew that jurors are more easily persuaded by their attorneys’ often-times baseless medical arguments than are experienced arbitrators.
The Raleigh personal injury law firm of Maginnis Law represents clients involved in serious automobile accidents and can assist you with your UIM claim. We offer free consultations from our downtown Raleigh office. All cases are handled on a contingency basis, meaning you pay attorneys’ fees only if we settle your claim or recover a verdict at trial.
To speak with a Raleigh underinsured motorist coverage attorney, call Shawn Howard at 919.480.8526 or Ed Maginnis at 919.526.0450. If you would like to send a confidential email to our Wake County UIM lawyers containing the details of your case, please use our contact page. The firm regularly represents clients from around the Triangle area, including Raleigh, Cary, Durham, Apex, Garner, Chapel Hill, Pittsboro, Holly Springs, Fayetteville, and Greenville.