When you suffer injuries in a car accident caused by another driver, you may assume their insurance coverage will compensate you for your harm. However, depending on the identity of the driver at fault for a car accident in North Dakota, drop down coverage may play a role in determining how much compensation you might recover in an injury claim. Understanding how drop down coverage works in North Dakota insurance policies can help you assess your rights and options when you pursue a compensation claim against an at-fault driver.
What Is Drop Down Coverage?
“Drop down coverage” refers to a provision in a car insurance policy that can reduce the amount of insurance coverage the policy provides under certain circumstances. When circumstances trigger drop down coverage, a car insurance policy may provide only the minimum coverage limits required by North Dakota law – $25,000 per person, $50,000 per accident of bodily injury liability coverage, and $25,000 per accident of property damage liability coverage – even if the policyholder purchased higher coverage limits.
A drop down coverage provision usually goes into effect when someone other than a named insured or a relative living in the policyholder’s household drives the insured vehicle and causes personal injury or property damage to others in a car accident. You can tell whether a car insurance policy includes this coverage if it uses terms like “drop down” or “named driver exclusion” in the policy endorsements.
How Drop Down Coverage Works in North Dakota
Drop down coverage usually goes into effect in North Dakota when a person other than a named driver or a relative of the policyholder living in the policyholder’s residence operates a vehicle insured by the policy. For example, suppose a person lends their car to a friend, and that friend gets into an accident with the vehicle. In that case, a drop down coverage provision would reduce the amount of insurance coverage from whatever policy limit the car’s owner purchased – $100,000 per person, $300,000 per accident of bodily injury liability coverage, and $100,000 per accident of property damage liability coverage, for example – to the minimum coverage required in North Dakota.
How Drop Down Coverage Can Affect a Personal Injury Claim
When the driver at fault for a car accident in North Dakota triggers drop down coverage for the policy insuring their vehicle, injured accident victims may face a significant challenge in recovering maximum compensation for their losses. Drop down coverage may result in the at-fault driver having only $25,000 to compensate an accident victim for their injuries and $25,000 to pay them for property damage. In that scenario, an accident victim may have to pursue compensation from other insurance policies that might cover the at-fault driver.
Alternatively, an accident victim may turn to their auto insurance policy when drop down coverage applies to the at-fault driver’s insurance. Auto policies in North Dakota must provide underinsured motorist (UIM) coverage of at least $25,000 per person, $50,000 per accident (although policyholders may purchase higher coverage limits). UIM coverage can apply when an at-fault driver has a bodily injury liability coverage limit lower than the injured victim’s UIM coverage limit.
Contact a Personal Injury Attorney Today
If you suffered injuries in a car accident, the circumstances surrounding the at-fault driver may trigger drop down coverage that can make it more challenging to obtain the full financial recovery you deserve. Contact Maring Williams Law Office today for a free, no-obligation consultation with a car accident lawyer to learn more about how drop down coverage may affect your right to compensation after a car crash.
