(InjuryBoard) – North Carolina law requires every motor vehicle to be insured by a liability insurance policy.

Private passenger automobiles are required to have liability insurance limits of no less than $30,000.00 per person and $60,000.00 per accident. 

Such a policy would only provide a maximum coverage of $30,000.00 per person and a maximum of $60,000.00 for everyone injured in the accident. For instance, if there were four people who were injured in an accident, those four people would have to split the $60,000.00 maximum insurance coverage.

 Obviously, the minimum limits for passenger vehicles are way too low. One short trip to the hospital could result in medical bills far in excess of $30,000.00.

 A little known fact however is that commercial vehicles are required to have a minimum of $750,000.00 coverage.

 North Carolina statutory law provides that the owner of a commercial motor vehicle shall have financial responsibility for the operation of the motor vehicle in an amount equal to that required for for‑hire carriers transporting nonhazardous property in interstate or foreign commerce by federal code 49 C.F.R. § 387.9.

 That federal law to which the state statute makes reference requires $750,000.00 liability insurance.

 Although the statute places the burden upon the owner of commercial vehicles to provide the required insurance, North Carolina case law provides that the minimum liability insurance coverage required by statute is “written into every insurance policy as a matter of law”. Therefore, even if the written insurance policy itself shows lower limits on the face of the policy, the law in North Carolina “rewrites” the insurance policy such that the insurance company is required to provide automatically the higher insurance limit.

 This law was recently applied by the North Carolina Court of Appeals in a case entitled NC Farm Bureau Mutual Insurance Company v. Armwood. Armwood was injured in a 30‑passenger bus owned by an individual named Jimmy Lee Best. Best insured the passenger bus only up to $50,000.00.

 The insurance company argued that it should not be liable for providing insurance for the full $750,000.00 minimum limits when Best only paid for a $50,000.00 policy. The court of appeals disagreed with the insurance company and held the insurance company liable for the full $750,000.00 in coverage.

 The lesson for the consumer in this case is that an injured party is not limited by the limit of insurance set out in the written policy itself. Inquiries should be made as to the minimum limits required by North Carolina law.

 We see the application of this law most often arising out of collisions our clients have with motor vehicles insured in South Carolina. South Carolina has minimum limits of only $15,000.00. When that South Carolina car is driven in North Carolina and a motor vehicle collision occurs, North Carolina law requires the insurance company to provide the full $30,000.00 minimum limit in the case of ordinary passenger vehicles.

 If you are in a collision with a commercial vehicle, that vehicle, if it is insured at all, is insured for the full North Carolina minimum limit of $750,000.00 no matter what the face of the policy says.

 What is a commercial vehicle? In North Carolina law a commercial vehicle is defined as:

 A. A single motor vehicle, or a combination of motor vehicles (including a towing unit), that has a combined gross vehicle weight rating (weight when fully loaded) of at least 26,001 pounds. .

 B. Any motor vehicle designed to transport 16 or more passengers including the driver.

 C. Any motor vehicle transporting hazardous materials as defined under federal law.

 Before settling a personal injury claim, it is a good idea to check with an experienced personal injury lawyer to determine the full extent of your legal rights and the full extent of insurance coverage to which you are entitled.