ON THIS PAGE
Quick answer: Uninsured motorist (UM) coverage pays when the at-fault driver has no insurance. Underinsured motorist (UIM) coverage pays when their insurance is too low for your injuries. In North Carolina, policies issued or renewed since July 1, 2025 include both, and UIM is no longer reduced by the other driver’s limits.
What we see at ALLCHOICE
What happened: A client’s daughter was driving her own car, insured on his personal auto policy, when a driver carrying only the state minimum limits hit her. She was seriously hurt and had to be flown from the scene.
The gap: The at-fault driver’s coverage ran out quickly. The underinsured motorist limits on the family’s personal auto policy did not go far enough either, and the injuries were still far from covered.
What our Risk Advisors did: They noticed our client also carried a separate business auto policy in his own name, and they asked that carrier to review whether its underinsured motorist coverage could apply. That review is still underway.
Not sure how much underinsured motorist coverage your family has? Your Risk Advisor can walk through your policy with you, or we can compare options across carriers.
What does uninsured motorist (UM) coverage cover?
Uninsured motorist (UM) coverage steps in when the driver who caused the crash has no liability insurance. North Carolina law also extends it to hit-and-run crashes, and it generally covers injuries to you and the people in your car.
Think of it as the coverage that stands in for the other driver’s missing policy. The law requires it to include property damage you are legally entitled to recover from an uninsured driver, with a $100 deductible, and there are reporting rules after a hit-and-run. Both are in G.S. 20-279.21. Exact terms depend on your policy, so check your declarations page.
What does underinsured motorist (UIM) coverage cover?
Underinsured motorist (UIM) coverage applies when the at-fault driver has insurance, but not enough to cover your damages. It is built for the situation our client’s family faced: a driver carrying only the minimum.
The minimum is lower than many serious injuries cost. Since July 1, 2025, North Carolina’s minimum liability limits are 50/100/50: $50,000 per injured person, $100,000 per crash and $50,000 for property damage. A single hospital stay can pass that, which is where UIM comes in.
What changed for underinsured motorist (UIM) coverage in North Carolina?
The biggest change is that UIM is no longer cut down by the at-fault driver’s liability limits. Under the old comparison, a UIM limit no higher than the other driver’s liability limit could leave UIM paying little or nothing, as a Hedrick Gardner summary of the law explains.
Under S.L. 2023-133, the other driver’s limits count as used up when they are paid or tendered. UIM then applies on top of that payment, and it is generally not reduced by credits against other coverage, with workers’ compensation the exception. The NC Rate Bureau reports that S.L. 2024-29 moved the effective date to July 1, 2025, for policies issued or renewed on or after that date.
The same law made UIM part of every new or renewed policy, according to NC State Extension. If your policy renewed before July 1, 2025, the older rules may still apply until it renews, so check the date on your policy.
Can more than one policy’s underinsured motorist (UIM) coverage apply?
Sometimes. Under S.L. 2023-133, a person with more than one nonfleet private passenger auto policy can generally combine the highest UIM limit from each policy, but limits for different vehicles on the same policy cannot be added together.
Whether a second policy applies depends on its wording, who it covers and what kind of policy it is, so ask your Risk Advisor to look at every policy in the household. For questions about how a specific claim will be decided, an attorney is the right person to ask.
What this means in North Carolina
North Carolina’s minimums were raised, but they are still a floor. Many of the drivers who share the road with you carry the minimum, and a serious injury can run past it quickly. Your own UM and UIM limits decide how much protection your family has when that happens.
The law changed in 2025, and renewals roll in at different times, so two neighbors can hold policies under different rules. Whether you live in Greensboro, Hendersonville or Wilmington, the safest habit is to read the UM/UIM line on your declarations page at every renewal. As an independent agency, we compare auto coverage across carriers, so you can see what higher UM/UIM limits look like from different companies.
Uninsured vs. underinsured motorist coverage at a glance
| Compare | Uninsured (UM) | Underinsured (UIM) |
|---|---|---|
| The other driver | Has no liability insurance, or is a hit-and-run driver | Has insurance, but too little for your damages |
| What it helps with | Injuries, and property damage you are entitled to recover, when no one’s policy pays | Injuries beyond what the at-fault driver’s policy pays |
| NC rule to know | Generally required in NC auto liability policies; ask what limits you carry | Since July 1, 2025, not reduced by the other driver’s limits |
| Where to check | Your declarations page | Your declarations page, plus any other household auto policies |
Questions to ask your Risk Advisor
- What are my UM and UIM limits today, and how do they compare to my liability limits?
- Did my policy renew before or after July 1, 2025?
- Do my family members, including teen drivers, have the same protection I do?
- Do I have any other policy in the household that a Risk Advisor should review?
People also ask
Generally, yes. North Carolina law requires auto liability policies to include uninsured motorist coverage, with exceptions such as policies that apply only to commercial or fleet vehicles. Your limits depend on your policy.
Yes, generally. North Carolina law extends uninsured motorist coverage to hit-and-run crashes. The law also sets reporting requirements, so report the crash to law enforcement and your insurer promptly.
It can cover both. North Carolina law requires uninsured motorist coverage to include property damage you are legally entitled to recover from an uninsured driver, and each insured bears the first 0. Collision coverage works differently, so ask your Risk Advisor how your policy handles each.
Often, yes, because many policies extend UM and UIM to resident family members. Whether it applies depends on your policy, so ask your Risk Advisor.
Final verdict
Uninsured and underinsured motorist coverage fill two different gaps, and the 2025 changes make UIM more valuable than it used to be. Your limits are printed on your declarations page, so you can check them in a few minutes. At your next renewal, ask your Risk Advisor what higher limits would look like.
Compare auto insurance quotes from multiple carriers
Already a client? Visit the Member Center or call your Risk Advisor to review your coverage or report a claim.
Related: Auto insurance in North Carolina · Does car insurance cover hitting a deer in NC? · What is contributory negligence in North Carolina?
Sources
- G.S. 20-279.21, North Carolina General Assembly
- S.L. 2023-133, North Carolina General Assembly
- Personal Auto S.L. 2023-133 and S.L. 2024-29, NC Rate Bureau
- NC Auto Insurance Minimum Coverage Levels to Increase Starting 7/1, NC State Extension
- Changes to Uninsured and Underinsured Motorist Law, Hedrick Gardner
Coverage depends on your policy, carrier and situation. This article is general information, not a coverage decision — talk to your Risk Advisor about your policy.