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APA: Porter, T. (2024, July 24). North Carolina auto insurance laws. Bankrate. Retrieved September 11, 2024, from https://www.bankrate.com/insurance/car/north-carolina-car-insurance-laws/
Copied to clipboard!MLA: Porter, TJ. "North Carolina auto insurance laws." Bankrate. 24 July 2024, https://www.bankrate.com/insurance/car/north-carolina-car-insurance-laws/.
Copied to clipboard!Chicago: Porter, TJ. "North Carolina auto insurance laws." Bankrate. July 24, 2024. https://www.bankrate.com/insurance/car/north-carolina-car-insurance-laws/.
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TJ Porter is a contributing writer for Bankrate with eight years of experience writing about finance. TJ writes about a range of subjects, from budgeting tips to bank account reviews.
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If you’re driving in North Carolina, knowing the ins and outs of North Carolina auto insurance laws is vital. To keep your vehicle legal and avoid penalties, you need to be aware of what type of auto insurance is required by law in NC. The state mandates that drivers carry a minimum amount of liability coverage and uninsured motorist coverage. These requirements help protect you and others on the road, ensuring that if an accident occurs, there’s a safety net in place. To help you become fully informed, we’ll uncover all the important information you need to know about North Carolina car insurance laws.
Before buying car insurance, it’s good to know what type of auto insurance is required by law in NC. While insurers aren’t allowed to sell less than the state-mandated minimum coverage, knowing the specifics can help when you’re shopping around and exploring coverage options.
Here are North Carolina car insurance laws and requirements, per the North Carolina Department of Motor Vehicles (NCDMV):
Liability insurance helps pay for other drivers’ damage and injuries if you cause an accident. Here is the amount of coverage that the state requires:
However, drivers in North Carolina should know that minimum coverage insurance may not be enough to cover the full cost of an at-fault accident. For example, if someone causes an accident and the other driver has $80,000 in medical bills, minimum coverage insurance would only cover $30,000 in expenses. The at-fault driver would be responsible for paying the remaining $50,000 out of pocket.
It is also important to note that liability insurance does not protect your vehicle. A minimum liability policy pays for medical expenses or property damage for the other party if you are at fault in the accident. If you want protection for your vehicle, you must add full coverage to your policy.
Most insurance professionals recommend that drivers purchase coverage above and beyond the minimum state requirements for more protection. Getting more coverage means paying a higher premium, but it offers a greater level of coverage and reduces financial risk.
North Carolina is an at-fault state. That typically means when someone gets into an accident, the at-fault driver is responsible for the damage. However, the state acknowledges contributory negligence, meaning if you are found to be partially at fault, you may not be able to collect a liability payout from the other party’s insurer, even if the other driver was more at fault.
Driving without car insurance in North Carolina is illegal and comes with penalties. If a driver’s insurance policy is canceled or their coverage lapses, the North Carolina DMV will send a notification to the vehicle owner. The driver has 10 days after receiving the notification to respond with proof of insurance.
If the driver does not respond to the notification within 10 days, the DMV can revoke the vehicle’s license plates and the driver will pay a $50 fine and $50 restoration fee. For a second offense, a driver will pay a $100 fine and $50 restoration fee, and all subsequent insurance lapses come with a $150 fine and $50 restoration fee.
North Carolina requires all drivers to carry vehicle insurance to meet the state’s minimum coverage standards. When selecting auto insurance, you typically have two main options: minimum coverage, which complies with the legal requirements, or full coverage, which offers more extensive financial protection and is usually more expensive. Full coverage is often a necessity if you are financing or leasing your vehicle. Full coverage insurance generally includes:
Both coverage types usually involve a deductible, the amount you must pay out of pocket before your insurance covers the rest.
There are also several add-on coverage options that could benefit drivers in North Carolina:
To find the best car insurance company for your situation, it can be helpful to consider your priorities. If cost is most important to you, for example, consider a company that is known for writing cheap policies. If superior customer service is your top priority, you may want to review the companies that rank high on J.D. Power’s Customer Satisfaction Ranking. Other companies may be a good choice if you are a high-risk driver, or if you are retired or work from home and drive infrequently.
The average cost of a full coverage car insurance policy in North Carolina as of July 2024 is $1,827, while state-mandated minimum coverage costs an average of $536. North Carolina drivers may be pleased to know these rates are below the national averages, which are $2,273 for full and $621 for minimum insurance. Keep in mind that your own rate is likely to vary from the averages, since it is based on a broad range of factors that are unique to you, from your age, credit history and driving record, to your car’s age, make and model.
The cheapest car insurance company in North Carolina depends on many factors. The type of coverage you need, the kind of vehicle you drive, your driving history and the drivers you have listed on your policy all affect how much your premium will be (among other factors). The best way to find the most affordable policy is to shop around and compare rates for the same coverage types and policy limits (or as close to the same as possible).
Arrow Right Contributor, Personal Finance
TJ Porter is a contributing writer for Bankrate with eight years of experience writing about finance. TJ writes about a range of subjects, from budgeting tips to bank account reviews.
