Picture this: you’re driving home after a long day, and another car runs a red light — causing a serious accident. Thankfully, you’re okay, but your vehicle is damaged, and medical bills start to pile up. Then you find out the other driver has no insurance or not enough to cover the costs.

That’s where Uninsured and Underinsured Motorist Coverage (UM/UIM) steps in. This often-overlooked part of your auto insurance policy ensures you’re protected financially when other drivers can’t pay for the damages they cause.

If you live in Hickory, NC, understanding this coverage is especially important, as not every driver on the road carries sufficient insurance. Let’s break down what UM/UIM coverage is, how it works, and why it’s a smart choice for North Carolina drivers.

Understanding Uninsured and Underinsured Motorist Coverage

Uninsured and underinsured motorist coverage is designed to protect you when the at-fault driver either doesn’t have insurance or doesn’t have enough insurance to pay for your losses.

A. Uninsured Motorist (UM) Coverage

This portion of your policy helps when:

• The other driver has no insurance at all.
• You’re the victim of a hit-and-run and can’t identify the driver.

UM coverage can pay for:

• Vehicle repairs or replacement
• Medical expenses
• Lost wages
• Pain and suffering (depending on your policy)

B. Underinsured Motorist (UIM) Coverage

This applies when the at-fault driver has insurance, but their liability limits are too low to cover all your expenses.

UIM coverage bridges the gap between what their insurance pays and what you actually owe.

Why UM/UIM Coverage Is So Important

Even though most states — including North Carolina — require drivers to carry auto insurance, not everyone follows the law. Others only purchase the minimum coverage, which might not come close to covering damages in a serious accident.

Did You Know?

According to national insurance data, roughly 1 in 8 drivers in the U.S. is uninsured. And in many areas, including Hickory, NC, underinsured drivers are even more common.

Without UM/UIM coverage, you could end up paying:

• For vehicle repairs out of pocket
• For your own hospital bills and physical therapy
• For lost income if you’re unable to work after an accident

Having UM/UIM coverage ensures you’re not left footing the bill for someone else’s mistake.

What Does Uninsured/Underinsured Coverage Include?

A. Bodily Injury Coverage

Covers medical expenses for you and your passengers if injured by an uninsured or underinsured driver.

Examples of covered costs include:

• Hospital stays, surgery, and ongoing treatment
• Lost wages if you can’t work
• Long-term care or disability expenses

B. Property Damage Coverage

Pays for repairs or replacement of your car and other damaged property.

• Some states include this automatically with UM coverage, while others require it as an add-on.
• Check your policy details or talk with your agent to confirm what’s included.

C. Hit-and-Run Accidents

If a hit-and-run driver damages your car or injures you, UM coverage can help pay for your losses — as long as you report the incident promptly to law enforcement and your insurer.

How UM/UIM Coverage Works in North Carolina

In North Carolina, uninsured and underinsured motorist coverage is required by law for all drivers who carry bodily injury liability coverage.

Minimum Coverage Limits in NC (as of 2025):

• $30,000 for bodily injury per person
• $60,000 for bodily injury per accident
• $25,000 for property damage

Your UM/UIM coverage must match these liability limits, ensuring consistent protection. However, you can choose higher limits to increase your financial safety net.

When and How UM/UIM Coverage Applies

Here’s a simple example of how this coverage works in real life:

• You’re hit by a driver who only has $25,000 in liability coverage.
• Your medical bills total $50,000.
• Their insurance pays $25,000, and your UIM coverage pays the remaining $25,000 (up to your policy limit).

UM/UIM Coverage Can Apply To:

• Accidents where another driver is at fault and uninsured
• Hit-and-run collisions
• Passengers in your car injured by uninsured drivers
• Accidents while walking or biking (depending on your policy)

How Much Does UM/UIM Coverage Cost?

The good news is that UM/UIM coverage is generally affordable, especially compared to the potential costs of being in an accident without it.

Typical Cost Factors:

• Your chosen coverage limits
• Driving history and location
• Vehicle type and value
• State requirements (like those in North Carolina)

In most cases, adding or increasing UM/UIM coverage only raises premiums by a few dollars per month — a small price for significant peace of mind.

Why Every Driver Should Consider Higher Limits

Even though North Carolina’s minimum insurance requirements provide a foundation, serious accidents can easily exceed those limits.

Reasons to Choose Higher Coverage:

1. Rising Medical Costs: Hospital bills can reach tens of thousands of dollars after a single accident.
2. Vehicle Repair Expenses: Modern vehicles are more expensive to repair due to technology and safety systems.
3. Peace of Mind: Knowing you’re fully covered, regardless of who’s at fault, offers priceless reassurance.

By opting for higher UM/UIM limits, you’re ensuring your family and finances stay protected — especially if an accident involves an uninsured or underinsured driver.

Tips for Managing and Reviewing Your Coverage

1. Review Your Policy Annually: Check that your UM/UIM limits align with your financial needs.
2. Ask About Stacking Options: In some states, stacking allows you to combine coverage across multiple vehicles for greater protection.
3. Understand Exclusions: Some policies exclude certain scenarios, such as using your vehicle for business — clarify these with your agent.
4. Work With a Local Agent: A local insurance professional familiar with Hickory, NC can help tailor your policy to fit local laws, traffic patterns, and risks.

Conclusion

Accidents are unpredictable, but your financial protection doesn’t have to be. Uninsured and Underinsured Motorist Coverage is one of the smartest — and most affordable — ways to safeguard yourself against irresponsible or underprepared drivers.

For drivers in Hickory, NC, where traffic and insurance compliance can vary, ensuring you have sufficient UM/UIM coverage can make all the difference when life takes an unexpected turn. Take time today to review your policy, talk with your insurance agent, and confirm you’re fully protected on the road.


At Freedom Insurance Group, Inc., we aim to provide comprehensive insurance policies that make your life easier. We want to help you get insurance that fits your needs. You can get additional information about our products and services by calling our agency at 828-322-7474. Get a free quote today by CLICKING HERE. 

Disclaimer: The information presented in this blog is intended for informational purposes only and should not be considered as professional advice. It is crucial to consult with a qualified insurance agent or professional for personalized advice tailored to your specific circumstances. They can provide expert guidance and help you make informed decisions regarding your insurance needs.