In North Carolina, underinsured motorist (UIM) coverage is designed to protect you if you are involved in a car accident with an underinsured. NC does not require UIM coverage for drivers. However, it is highly recommended.
UIM coverage availability has requirements. Failure to meet the requirements can result in UIM coverage denial, even if you didn’t cause the accident. Recently, the North Carolina Court of Appeals decided Insurance Exchange v. Strickland, as case in which the Court demonstrates how crucial timing and proper notice are in preserving your rights after an accident with an underinsured driver.
About Erie Insurance Exchange v. Strickland
In Erie Insurance Exchange v. Strickland (2025), the Court provides the framework for a plaintiff to maximize UIM benefits following a car accident. Strickland, the Plaintiff, suffered serious injuries in a head-on collision. The adverse had $30,000 in liability insurance issued by GEICO. Strickland’s collision related medical bills totaled $75,000, exceeding the adverse driver’s insurance liability policy. GEICO offered its $30,000 coverage limit. Because the plaintiff had a UIM coverage capped at $1 million, he turned to his insurance company, Erie Insurance.
On July 13, 2022, Strickland notified his insurance company about GEICO’s offer and indicated that he wanted to pursue a UIM claim. Thirteen days later, he signed a settlement agreement with GEICO in the form of a “Covenant Not to Enforce Judgment,” effectively settling his claim with the at-fault party and releasing GEICO and the at-fault driver from further liability.
The issue wasn’t that the plaintiff accepted GEICO’s offer. The problem was timing. Under NC General Statute Section 20-279.21(b)(4), once a car accident claimant gets a settlement offer from the at-fault driver’s insurance company, they must provide written notice of the offer to their own UIM insurer. Their insurer then has 30 days to either match the offer, therefore preserving its right to seek reimbursement from the at-fault driver’s insurance company (known as subrogation) or waive that right and allow the settlement to proceed.
In this case, while the claimant provided his insurer (Erie) with a written notice of the offer on time, he did not wait the full 30 days before finalizing the settlement with the at-fault driver’s insurance company. By signing the agreement with GEICO before the 30-day window expired, Strickland eliminated Erie’s ability to preserve its subrogation rights. As a result, the trial court ruled that Erie was not obligated to provide UIM coverage. Strickland appealed this decision, and the Appeals Court affirmed it.
Lessons from Erie Insurance Exchange v. Strickland
What Should This Case Teach You?
There are several crucial lessons you can take away from this case if you are pursuing a UIM claim in North Carolina.
- Give your UIM insurer proper written notice as soon as the at-fault driver makes a settlement offer.
- The law gives your insurance company time to act. Don’t assume or expect them to act immediately.
- Wait the full 30 days before finalizing any settlement or signing any release forms. Otherwise, you might lose coverage.
Finally, when dealing with a UIM claim, it is advisable to consult a car accident attorney. A skilled attorney can ensure all legal requirements are met. They can help you preserve your right to compensation.
Contact Us for Legal Help
If you’ve been involved in an accident with an uninsured or underinsured driver, contact The Stone Law Office for help pursuing compensation.
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