Although North Carolina legislators have set a standard for automobile insurance policies for all drivers, in some cases one driver will be uninsured or underinsured. In this case, we look at UM (Uninsured Motorist Coverage) and UIM (Underinsured Motorist Coverage).
Uninsured Motorist Coverage pays for damages that are caused by a negligent driver that has no insurance or has insurance at the level of North Carolina's minimum policy limits (ex. a driver from out-of-state). This policy can also cover you in the case of a hit-and-run driver. For UM coverage to apply, the only requirement is that the unidentified vehicle made contact with the vehicle occupied by the injured party (which means that it doesn't apply in the case that you return to your parked car to find it damaged).
Underinsured Motorist Coverage pays for damages caused by a negligent driver that has insufficient insurance coverage to cover all of the injured party's damages. However, this coverage only pays up to the difference between the amount of UIM coverage and the amount of liability coverage for an underinsured vehicle.
These types of coverage can be found in your personal policy, in the insurance policy for the vehicle, in the policy for the driver, in the policy of any of the injured party's family members, or in any commercial policies that may insure the injured party.
It is important to note that North Carolina allows inter-policy stacking. For example, if you have UIM coverage for $100,000 and your parents have UIM coverage for another $100,000, your total coverage goes up to $200,000!