Car insurance is used to protect you against expenses that you might not otherwise be able to afford if you are involved in a car accident. The collision pays for damage to your car that results from a collision, whether you hit another car or hit a street lamp. Most health insurance plans don't cover funeral expenses, and some don't cover injuries caused by car accidents. Before hitting the road in North Carolina, all drivers must have an auto insurance policy that includes at least the coverage limits required by the state, along with proof of coverage.
While car insurance is the most common form of coverage, you can choose an alternative type of financial responsibility. North Carolina law requires drivers to purchase minimum amounts of regular car insurance, insurance for uninsured motorists, and insurance for underinsured motorists. Underinsured driver's insurance protects the driver when the at-fault driver who caused their injuries has motor vehicle insurance, but doesn't have enough coverage to pay for the injured party's full costs. A minimum car insurance policy in North Carolina includes coverage for uninsured drivers, which protects you and your passengers after an accident, and liability insurance, which protects anyone else affected.
When a driver purchases a policy for uninsured drivers, their own insurance company takes over the place of the at-fault driver's insurance company and pays the costs related to the injury.