PROCEDURAL ASPECTS OF UM CLAIMS AND STATUTES OF LIMITATIONS
The following is from Section 2.06 of Chapter 2 of the New Appleman North Carolina Insurance Litigation (2020 Edition of the LexisNexis Practice Guide). Chapter 2 is entitled “Automobile Insurance” and was written by PCKB’s Paul Coates. Section 2.06 pertains to “Procedural Considerations” for Uninsured (UM) and Underinsured (UIM) Coverages, and Section 2.06[b] pertains to the “Procedural Aspects of UM Claims/Statutes of Limitations.”
 Procedural Considerations.
[a] In General.
UM and UIM claims can be litigated by the filing of a lawsuit or can be arbitrated as outlined by the policy. There is no statutory mandate for arbitration. If an injured party wishes to arbitrate the matter, then one must be careful not to waive arbitration by filing a lawsuit and engaging in extensive litigation expenses and costs, thus constituting waiver.
[b] Procedural Aspects of UM Claims/Statute of Limitations.
The procedural aspects of UM claims differ somewhat from underinsured claims. Although not outlined in the statute, an uninsured claim must be filed and served upon the UM carrier prior to the statute of limitations expiring.
Attorney’s Tip: Note that UM Claims must be served on the UM carrier within the statute of limitations, that is, before the date the statute of limitations runs. This differs from UIM claims. This rule is the result of case law interpretation, and not because of any specific language of the statute.
Although not strictly enforced, there are notice requirements and procedural requirements in N.C. Gen. Stat. § 20-279.21(b)(3) requiring the injured party to give a 60-day notice to the insurer prior to filing suit. Remember, if the uninsured claim is a hit-and-run claim, notice must be given to the police within 24 hours and forms returned to the UM carrier 15 days within receipt. The hit-and-run case also requires a 60-day notice before the initiation of the suit.
Arbitration must also be demanded within the statute of limitations – that is, prior to the statute of limitations running. This requirement is found in the policy and the policy indicates that any arbitration action must begin within the time allowed for bodily injury or death actions in the state where the accident occurred.
The author does not interpret this to mean that the arbitration hearing must occur within the statute of limitations, only that the arbitration must be demanded. Any request for arbitration should be in writing, and sent either certified mail, return receipt requested, faxed, or written in some form that authenticates that it is timely requested.
Even if arbitration is requested, it is common to file a lawsuit in order to “preserve” the statute of limitations in UM claims. It is prudent to request the arbitration in the filing of the lawsuit, remembering that the lawsuit must be served before the three-year statute of limitations runs in UM cases.
There have been multiple variations of the arbitration agreement in various policy forms throughout the history of UM/UIM coverages. One should make sure they have the correct policy language in effect at the time of the accident when dealing with all UM/UIM issues, especially arbitration.
With respect to commercial policies, it should be noted that some commercial policies do not contain arbitration clauses even when they carry UM/UIM coverage. Another reason to file a lawsuit in conjunction with an arbitration is to make a claim for prejudgment interest. Unless an actual lawsuit is pending, prejudgment interest is not included in the potentially recoverable damages in the arbitration.
Cross-Reference: New Appleman on Insurance Law Library Edition, §§ 65.01, 65.03 (LexisNexis).