What needs to happen before an attorney can accept an underinsured motorist settlement tender?

A UIM Tender Is More Than an Offer to Send Payment

Underinsured motorist coverage, often called UIM coverage, may apply when an at-fault driver’s liability insurance is not enough to compensate an injured person for the covered loss. A tender from the UIM insurer generally means the insurer is offering to pay an amount to resolve some or all of its obligations.

The word “tender” does not answer several important questions. The attorney must determine whether the payment would settle only the UIM claim, whether it would release additional claims, and whether the insurer expects an assignment or other protection for its recovery rights.

The settlement decision belongs to the client. An attorney may advise the client, negotiate terms, and identify legal risks, but should obtain the client’s authorization before forming a final settlement agreement.

What Should Be Confirmed Before Acceptance?

1. The Exact Scope of the Settlement

The proposed release and all related documents should be reviewed carefully. The attorney should determine:

• Which insurance policy and coverage are being resolved.
• Whether the tender settles the entire UIM claim or only a defined portion.
• Whether claims against the at-fault driver remain open.
• Whether the release includes property damage, loss of use, or other claims that were not intended to be settled.
• Whether the language requires indemnification for medical bills, benefit claims, or other reimbursement demands.
• Whether confidentiality, assignment, or subrogation provisions create additional obligations.

A broad release can affect rights beyond the payment being discussed. If its language does not match the intended agreement, the terms may need to be clarified or revised before acceptance.

2. The Client’s Informed Approval

The client should receive a plain-English explanation of the tender, the proposed release, and the practical consequences of accepting it. That discussion ordinarily includes the amount offered, fees and case expenses, known claims against the proceeds, and what part of the case would remain unresolved.

Acceptance and disbursement are separate steps. Even after a settlement is authorized, funds received for the client generally must be handled through the appropriate client trust account. The attorney must also address valid claims against the proceeds before distributing money.

3. The Effect on the At-Fault Party Claim

North Carolina’s UIM statute permits a UIM insurer, at its option, to make a payment without waiting for the at-fault driver’s liability coverage to be exhausted. Under N.C. Gen. Stat. § 20-279.21, an early UIM payment may give the insurer assignment or subrogation rights relating to the claim against the responsible driver.

Absent a contrary agreement, that payment does not automatically prevent the claimant from pursuing damages against the vehicle’s owner, operator, or maintainer beyond the UIM payment. However, a claimant who intends to continue pursuing that recovery must give the UIM insurer notice and an opportunity, at its expense, to participate. The settlement documents therefore must be consistent with the plan for the remaining liability claim.

4. Whether the Claim Is Developed Enough for a Decision

A UIM tender should be evaluated against the available evidence rather than viewed in isolation. Depending on the circumstances, the attorney may need to review:

• The crash report, photographs, witness information, and other evidence of fault.
• Medical records, itemized bills, and documentation connecting the injuries to the crash.
• Employment records or other support for claimed lost income.
• The at-fault driver’s liability limits and the amounts paid or still available.
• Declarations pages and other information identifying potentially applicable UIM policies.
• Prior payments, offsets, or credits claimed by the insurers.
• Written denial letters, reservation-of-rights letters, and adjuster communications.

If important records remain outstanding, the client may not yet have enough information to evaluate whether resolving the UIM portion is appropriate. Waiting can be reasonable when it serves a specific purpose, but delay should not be allowed to create a deadline problem.

5. Fault and North Carolina’s Contributory Negligence Rule

A UIM claim still depends on the claimant being legally entitled to recover from the underinsured driver. The insurer may dispute fault, causation, or damages even though it has made a tender.

North Carolina allows contributory negligence as a defense. If the defense proves that the injured person’s own negligence helped cause the crash or injury, that issue can create serious difficulties for the claim. The evidence should therefore address both the other driver’s conduct and why the injured person acted reasonably.

6. Liens and Reimbursement Claims

Before settlement proceeds are distributed, the attorney should identify possible medical provider liens, health-plan reimbursement interests, government benefit claims, workers’ compensation interests, and assignments signed during treatment. These obligations can affect the amount ultimately available to the client.

For certain North Carolina medical liens, N.C. Gen. Stat. § 44-50 requires a person receiving injury settlement funds to retain enough to address valid, noticed claims before disbursement. Identifying these issues before acceptance helps the client understand the likely net effect of the tender.

How This Applies When the Liability Claim Is Still Pending

In the situation described, the UIM insurer has submitted a tender while the attorney is still handling the related claim against the at-fault party. North Carolina law does not necessarily require the UIM portion to remain unresolved until the liability policy is exhausted. Even so, the attorney may need more progress on the liability claim before advising the client about the UIM tender.

Before returning to the tender, the attorney should confirm in writing that accepting it will not unintentionally release the at-fault party, end another available insurance claim, or interfere with the planned recovery process. The attorney should also address the UIM insurer’s potential subrogation or assignment rights and provide any required notice about continued pursuit of the at-fault party.

Once those issues are clear, the attorney can explain the options to the client and request a decision. The insurer’s desire to close one portion of the claim does not replace the need for informed client approval.

Do Not Overlook Filing Deadlines

Settlement discussions and an insurer’s tender do not automatically extend the deadline for filing a lawsuit. N.C. Gen. Stat. § 1-52 provides a three-year period for many personal injury actions, although the correct deadline depends on the particular claim and facts.

UIM claims also involve policy requirements and procedural steps that may affect how coverage is preserved. The attorney should calendar all potentially applicable deadlines while negotiations continue rather than assume the tender pauses them.

Information to Preserve While the Tender Is Under Review

• The tender letter and every proposed release or settlement agreement.
• The complete UIM policy and declarations page.
• Liability coverage information for the at-fault driver.
• All insurer correspondence and records of telephone discussions.
• Medical records, bills, visit summaries, and payment statements.
• Documents concerning health coverage, government benefits, or workers’ compensation.
• Evidence supporting fault, injuries, lost income, and other claimed losses.
• A current list of unresolved claims and expected settlement deductions.