As North Dakota drivers, we carry motor vehicle insurance as protection for ourselves, our families, our vehicles, and those we meet on the road. How does car insurance work? There are several types of car insurance the law requires North Dakota drivers to carry: no fault, liability, underinsurance (UIM), uninsured (UM), and property damage coverage.
NO FAULT INSURANCE
North Dakota law requires drivers to carry $30,000 in no-fault coverage which covers medical bills and loss of income/earning capacity as a result of a crash regardless of who is at fault in causing a crash. It applies to those occupying the vehicle, drivers and passengers alike. By having such insurance, medical bills and wage loss are covered by our own car insurance versus looking toward an at fault vehicle (liability) in causing the crash. Simply said, we are involved in a car crash, regardless of whose fault it is, we can immediately have our medical bills and lost wages covered.
When fully insured, we also maintain a policy for liability coverage to protect ourselves from risks and liabilities when we are involved in a crash. Liability insurance comes into play when a crash happens and its determined that we, as the driver of the vehicle, were at fault, whether entirely at fault or at fault for a portion or percentage. Liability insurance covers us drivers for bodily injury or death and property damage due to our negligence. However, our insurance will not cover our intentional acts in causing a crash.
UNDERINSURANCE AND UNINSURANCE
North Dakota law requires drivers to maintain uninsured (UM) and underinsured motorist coverage (UIM). Uninsured motorist coverage exists for bodily injury protection for the insured if the other party causing the injury does not have liability insurance. Underinsured motorist coverage exists for bodily injury protection if the other party causing the injury had liability coverage less than the amount of the insured person’s underinsured motorist coverage. Underinsured motorist coverage becomes triggered where there is a difference in limits. The excess approach has underinsured motor vehicle benefits apply in addition to any other recovery up to the policy limits. For example, if the insured involved in a crash recovered the at fault driver’s insurance in the amount of policy limits of $25,000 and had underinsured coverage of $100,000, the injured party could collect the difference between the two policies of $75,000.