Advocacy In Long Session Yields UIM Reform and Changes To Auto Insurance Minimums, Medical Records Requests and Eminent Domain Interest Rates
On Oct. 3, the advocacy and lobbying efforts of NCAJ and the support of many of our member-legislators helped usher into law several updates to automobile insurance law and eminent domain law with the passage of the state appropriations act, House Bill 259, and an insurance omnibus bill, Senate Bill 452.
Minimum Liability Insurance Limits Raised, UIM Credit Eliminated and UM Service Fixed
Senate Bill 452 raises the required minimum liability limits for the first time since 1999, ensuring adequate protections for people on the state’s roadways. For more than two decades, the minimum required automobile liability insurance limits in North Carolina remained stagnant at $30,000 per person/$60,000 per accident/$25,000 property damage. This meant that injured individuals often faced significant financial hardships when involved in wrecks with underinsured or uninsured motorists. The minimum limits have now been increased to $50,000 per person/ $100,000 per accident/$50,000 property damage, aligning them more closely with the rising costs of medical care and vehicle repair in today’s world. This change also guarantees that every insured driver has at least $50,000 in uninsured coverage if they are hurt or killed by an uninsured driver. The changes to rates go into effect for all policies and renewals issued on or after Jan. 1, 2025.
Another notable change introduced by Senate Bill 452 is the elimination of the Underinsured Motorist Insurance (UIM) credit for payments made by the liability insurer. Previously, UIM insurers could reduce benefits based on what the liability insurer had paid. Under the new law, UIM carriers will no longer receive any credit from their coverage for the payments made by the liability insurer. This change ensures that individuals who have responsibly purchased UIM coverage will receive the full benefits they purchased, regardless of any payments made by the liability insurer. This change will apply to UIM claims made on policies and policy renewals issued on or after Jan. 1, 2025.
The new law also addresses a critical issue created by Davis v. Urquiza, 233 N.C. App 462 (2014), which required that an uninsured insurer be served with a complaint before the three-year statute of limitations had expired. This requirement created unnecessary complications and burdens in the legal process. Senate Bill 452 rectifies this problem by stipulating that the complaint and summons need only be filed before the three-year statute of limitations has expired and can be served later, in accordance with Rule 4 of the N.C. Rules of Civil Procedure, like all other civil matters in the state. This change will go into effect Jan. 1, 2025.
Medical Providers Claiming Liens Have 60 Days To Produce Records
Senate Bill 452 modifies the North Carolina medical provider lien statute, N.C.G.S. 44-49(b) to place a time limit on the production of requested medical documents. The new law requires that as a condition precedent to the creation of the lien a medical provider must furnish, without charge to the attorney, requested itemized statements and medical records “within 60 days of receipt of the request.” This provision harmonizes federal HIPAA record production requirements with our current lien law. This provision became effective Oct. 3, 2023, and applies to all medical requests made on or after that date.
Right of Way Condemnation Interest Rate Parameters Set in Budget
Most civil judgments awarding monetary damages in our state receive judicial interest at the legal rate of 8%. Interest on awards in eminent domain takings had been restricted to the prime lending rate, which remained steady around 3.25% from 2009-2015. The appropriations act, House Bill 259, changes the interest rate calculation, which is still tied to the prime lending rate, but which now guarantees a minimum rate of 5% and a maximum rate of 8%. This change is set out on page 605 of the budget and goes into effect Oct. 21, 2023, and applies to causes of action filed on or after that date.
Protecting Established Laws
In addition to affirmative legislative changes, NCAJ’s Advocacy Team worked hard throughout the session to advise legislators against changing laws in ways that would negatively affect NCAJ members and their clients.
In the April 18, 2023, Court of Appeals decision Sturdivant v. NC Department of Public Safety (COA22-421) the Court interpreted a 2011 amendment to the Workers’ Compensation Act limiting wage-replacement benefits after 500 weeks. While the court decided against the plaintiff, it set out the definition of “total loss of wage-earning capacity” that business and insurance interests opposed. They pressed law makers to legislatively overrule the Sturdivant decision and enact language that would have explicitly or effectively ended benefits at 500 weeks. NCAJ engaged with legislative leaders and other stakeholders and arrived at compromise language that avoids a 500-week cap and under which seriously injured workers with long-term injuries will have their capacity to earn wages evaluated using real-world employability factors. The changes to G.S. 97-29(c) became law effective Oct. 3, 2023.
Because of efforts to build relationships with legislators and to provide excellent content expertise in our areas of practice, our Advocacy Team and leadership teams were frequently consulted. You can read about this in more detail in the complete Legislative Report that will be out later this month.
The legislative gains during the Long Session of the General Assembly came from a two-year long advocacy planning process. Beginning months before the session began, NCAJ members, sections, divisions and caucuses were polled on their legislative priorities for the coming legislative Long Session. The results of those surveys were compiled and evaluated by the Advocacy Committee. The Advocacy Committee, advised by our professional lobby team, evaluated each proposal through the lens of the NCAJ Advocacy Funnel. Each of the affirmative achievements outlined in this article were legislative priorities for this long session. NCAJ will continue to assess legislative priorities for each session by soliciting member input for our Advocacy Plan.