North Carolina Car Insurance
North Carolina’s Teen Driver’s License and Insurance Requirements Learn about the requirements for teens to obtain a driver’s license in North Carolina and what insurance is required. Here are the basics of how this system works and the various requirements teen drivers must abide.
In North Carolina, you are legally required to have a means of covering any costs of injuries or damages that may result from a car accident. The best way to fulfill this requirement is by purchasing car insurance.
Learn more about North Carolina car insurance requirements, options, and programs below.
NC Car Insurance Requirements
North Carolina requires that ALL drivers have liability insurance. This coverage helps pay for injuries and damages from a car accident for which you are at fault.
The minimum liability coverage limits are:
- $30,000 for bodily injury liability, per person per accident.
- $60,000 of bodily injury liability total per accident.
- $25,000 of property damage liability, per accident.
You are also required to have uninsured motorist coverage. This helps pay for your own accident-related injuries when the collision occurred with an uninsured driver.
The same minimum limits apply as with your bodily injury liability insurance.
Optional Car Insurance
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In addition to the required liability coverage, most NC auto insurance companies also offer optional types of auto insurance coverage.
Options typically include:
- Collision – This will cover collision-related damages to your car.
- (NOTE: This covers collisions with other moving vehicles.)
- Comprehensive – This will help cover damages to your car for non-collision incidents, such as vandalism.
- Towing and labor.
- Rental car.
NOTE: North Carolina does not require you to have collision and comprehensive coverages. However, your finance company or bank will require you to purchase comprehensive and collision car insurance IF you are paying off a loan or are leasing your car.
Proof of Insurance
North Carolina requires you to provide proof of insurance when registering your car.
Acceptable forms of proof of insurance include:
- A FS-1 form issued by your insurance agent certifying that you currently hold an insurance policy.
- Your NC car insurance policy.
- An insurance binder.
- An insurance card.
You can obtain any of the above from your car insurance carrier.
Safe Driver Incentive Plan
North Carolina's Safe Driver Incentive Plan (SDIP) is a program that helps promote safe driving through a point system that increases insurance costs for unsafe drivers.
Essentially, bad driving is penalized withincreased car insurance premiums.
Drivers get points when they have a traffic violation or are found at-fault in an accident. The more severe the violation or accident, the more points you may receive.
With each point increase, your car insurance premium will increase considerably. For example, 1 point results in a 30% increase on your insurance rate.
The North Carolina Department of Insurance offers a detailed look at how SDIP points are given and how they might affect you.
North Carolina Reinsurance Facility
Because North Carolina requires all drivers to have liability insurance, NC state laws do not allow car insurance companies to refuse liability coverage to any driver. However, high-risk drivers will typically payhigher premiums.
If you are considered a high-risk driver due to a poor driving record, an insurance company can elect to insure you through the North Carolina Reinsurance Facility (NCRF).
This organization offers insurers a way to share the risk associated with your policy amongst the insurers in the NCRF umbrella.
Drivers in the reinsurance facility will end up paying more in comparison with other drivers purchasing insurance policies.
Additionally, in order to keep their risk low, insurance companies apply the following maximum coverage amounts to facility policyholders:
- $30,000 of bodily injury liability, per person per accident.
- $60,000 of bodily injury liability, total per accident.
- $25,000 for property damage liability per accident.
- $2,000 for medical payments.
- $1,000,000 for uninsured drivers.
FS-1 Proof of Insurance
North Carolina requires that you have continuous car insurance coverage, meaning that it cannot lapse. If the DMV gets notification of a lapse on a certain date, they will send a request that an insurance agent confirm that you were sufficiently covered on that date by submitting an FS-1 as proof of insurance.
If the agent cannot confirm that you were covered on the date of the supposed lapse, you will be subject to fines and penalties, including the revocation of your license plate for 30 days.
If your license plates are suspended, you'll be able to reinstate them on the 31st day of suspension by:
- Paying the license plate fee.
- Paying any fees related to your insurance violation.
- Submitting an FS-1 form proof of liability insurance (to be completed and submitted by your car insurance agent.
Car Insurance Fraud in North Carolina
Insurance fraud costs customers like you a lot of money. Insurance companies use customers' premiums to make up for losses incurred from insurance fraud.
Because of this, the North Carolina Department of Insurance's Criminal Investigations Division takes insurance fraud very seriously.
Auto insurance fraud often involves the following:
- Car repair fraud:
- Overpricing costs of repairs.
- Overstating damages.
- Charging for new parts when using used parts.
- Staging accidents:
- Stopping suddenly to cause an accident.
- Reporting accidents with no real accident.
- Listing false drivers, passengers, and witnesses on a claim.
- Ignoring right-of-way rules or giving up the right of way to cause accidents.
Reporting Car Insurance Fraud
By reporting car insurance fraud, you can help keep auto insurance rates low.
In North Carolina, you can report suspected insurance fraud:
- Online through the National Association of Insurance Commissioners’ website.
- By e-mail to [email protected].
- By fax at (919) 715-1156.
- By phone:
- At (919) 807-6840.
- Toll-free within North Carolina at (888) 680-7684.
Car Insurance Discounts
When shopping around and comparing auto insurance quotes, inquire about discounts.
Some common discounts NC car insurance companies offer include:
- Good driver discount.
- Good student discount.
- Multiple car discount.
- Homeowner's discount.
- Auto-theft alarm discount.
- Airbag or safety device discount.
Taking advantage of these discounts can save you a significant amount of money. However, the best way to maintain low-cost car insurance rates is to drive safely and obey all traffic laws.
Most Stolen Cars in North Carolina
Owning a car model that is often stolen can mean higher car insurance rates.
The following is a list of the most stolen cars in North Carolina for 2013, according to www.nicb.org:
- Honda Accord.
- Honda Civic.
- Ford Pickup (Full Size).
- Chevrolet Pickup (Full Size).
- Toyota Camry.
- Ford Explorer.
- Dodge Caravan.
- Jeep Cherokee/Grand Cherokee.
- Nissan Altima.
- Dodge Pickup (Full Size).
Like many states, North Carolina requires vehicle owners to show proof of sufficient liability car insurance before license plates will be issued for the vehicle. In this article, we'll take an in-depth look at these requirements, and we'll touch on other key details related to auto insurance in North Carolina.
North Carolina is a 'Fault' Car Accident State
North Carolina is a 'fault' state when it comes to financial responsibility for injuries, vehicle damage, and other losses stemming from a car accident. In other words, the person who was at fault for causing the car accident is responsible for compensating anyone who suffered harm as a result of it (although from a practical standpoint it's typically the at-fault driver’s insurance carrier that will cover these losses, up to policy limits).
In North Carolina, a person who suffers losses due to a traffic accident usually can proceed in one of three ways:
- by filing a claim with his or her own insurance company, assuming that the loss is covered under the policy (in this situation, the insurance company will likely turn around and pursue a subrogation claim against the at-fault driver’s insurance company)
- by filing a third-party claim directly with the at-fault driver’s insurance carrier, or
- by filing a personal injury lawsuit in civil court against the at-fault driver.
Note: In no-fault car insurance states, claimants don't have this same range of options. If you're injured in a car accident in a no-fault state, you must turn to your own car insurance coverage for the payment of medical bills and other out-of-pocket losses, regardless of who caused the accident. Only if your claim reaches certain statutory thresholds can you step outside of no-fault and make a claim directly against the at-fault driver. But North Carolina drivers don't need to worry about no-fault when it comes to an in-state car accident.
Liability Car Insurance Minimums in North Carolina
If you're buying car insurance in North Carolina, the law requires you to have the following minimum amounts of liability car insurance coverage:
- $30,000 for bodily injury liability per person injured in an accident you cause
- $60,000 for total bodily injury liability when two or more people are injured in an accident you cause, and
- $25,000 for property damage per accident you cause.
This basic coverage pays for medical bills, vehicle damage, and other costs of drivers, passengers, and pedestrians who incur losses stemming from a car accident you cause, up to coverage limits. You can (and in some situations should) carry more coverage to protect you in case a serious crash results in significant car accident injuries and vehicle damage. Remember, once policy limits are exhausted, you are personally on the financial hook, so higher insurance limits can help protect your personal assets in the event of a serious crash.
Your liability coverage will kick in if any family member is driving your vehicle, or if you've given someone else permission to use it. It will likely also cover you if you get into an accident in a rental car.
Finally, remember that in North Carolina (and elsewhere) liability coverage can't be applied to your own injuries or vehicle damage after a car accident. You'll need different (additional) coverage for that if you're involved in a car accident and no one else's coverage applies to your losses. For example, personal injury protection (PIP) or MedPay coverage can be used to pay your car accident medical bills, and collision coverage can pay for repairs to (or replacement of) your damaged vehicle after a car accident.
Uninsured/Underinsured Motorist Coverage in N.C.
North Carolina requires that every car insurance policy sold in the state include both uninsured motorist bodily injury coverage and uninsured motorist property damage insurance. Underinsured motorist coverage may be required depending on how much coverage you carry under your policy. This coverage is crucial if you end up in a car accident with an uninsured driver, or one whose liability policy won't cover your losses.
More Information on Car Insurance in North Carolina
For more information on North Carolina’s motor vehicle insurance requirements straight from the state, check out these resources from the North Carolina Department of Transportation: