Are you required to have auto insurance in North Carolina? Here are detailed answers to the most common questions about auto insurance in North Carolina. We will review the requirements, liability limits, improper coverage, and more.
- Is auto insurance required in North Carolina?
- What does auto insurance cover?
- What is Uninsured and Underinsured Motorist coverage (UM/UIM)?
- What happens if I don’t have auto insurance?
North Carolina Auto Insurance Requirements
Auto insurance is required in North Carolina. NCDOT states, “all vehicles with a valid NC registration are required by state law (G.S. 20-309) to have continuous liability insurance provided by a company licensed to do business in North Carolina.” Out-of-state insurance policies are not accepted.
Minimum Coverage
The minimum coverage for auto insurance in North Carolina is 30/60/25 for bodily injury and property damage. NC law also requires coverage for uninsured motorists, which we’ll go into more detail about later in this article.
| NC Required Auto Insurance Coverage | Coverage Amount |
| Bodily injury (one person) | $30,000 |
| Bodily injury (two or more people) | $60,000 |
| Property damage | $25,000 |
| Uninsured | Equal to highest limits of bodily injury liability coverage |
(G.S. 20-279.21 NC “Motor Vehicle Liability Policy” defined.)
What Does Auto Insurance Cover?
Standard auto insurance plans cover bodily injury as well as proper damage. Here are explanations, as well as examples, of the different coverage. You will see that North Carolina’s minimum requirements are just that: a minimum. It’s best to speak with an experienced insurance agent to determine how much coverage is best for you and your family.
Bodily Injury Liability (one person)
The bodily injury policy will pay for injury-related damages as a result of an accident caused by you or another covered driver. Damages may include medical expenses, disability, rehabilitation, lawsuit settlements, legal fees, and more. Your bodily injury policy’s “maximum” is the total amount your insurance provider will pay for such damages.
For example, let’s say you caused an accident that injured the other driver, resulting in $40,000 in medical bills. If you carry the state minimum, you will be covered for $30,000. The great news is, your insurance policy just saved you $30,000. But, by having insufficient coverage, you could end up responsible for the remaining $10,000 out-of-pocket.
Aggregate Bodily Injury Liability (two or more people)
Also known as total bodily injury, this is the maximum amount you’re covered for all parties injured in the accident. Expanding on the previous example, let’s say the driver’s passenger was also injured and accrued the same amount of medical costs. Their total damages add up to $80,000. If you carry the NC state minimum of $60,000, your insurance would cover 75% of the costs. However, if you had chosen a policy that exceeded the state minimum, you could have been covered for 100%.
Property Damage Liability
If you are at fault, property damage liability will pay for damages to other people’s property as a result of the accident. Some examples of covered damages include:
- Vehicle repair
- Vehicle actual cash value (ACV)
- Damages to other real property (i.e., cell phones, laptops, tools inside the vehicle)
With our example, let’s assume the driver’s new truck was totaled with an Actual Cash Value of $30,000. North Carolina’s property damage minimum requirement would cover the full damage. But what if the driver was driving home from buying a brand new 80” TV, surround sound system, and gaming console? Property damage liability covers such damages as well, but only up to your policy’s maximum liability limit.
What is Uninsured and Underinsured Motorist coverage (UM/UIM)?
Uninsured and Underinsured Motorist covers YOU and anyone covered in your plan in the case the at-fault driver is unable to pay for YOUR damages.
Uninsured Motorist Coverage (UM)
Uninsured Motorist (UM) coverage protects policyholders involved in an accident caused by a driver who does not have liability insurance. This means your insurance will cover your damages even if you are not at fault, up to the policy’s limit. This policy also covers hit-and-run accidents.
North Carolina UM insurance requirements are equal to the highest limits of bodily injury liability coverage. So, if you carry $30,000 of bodily injury liability, then you must also carry a $30,000 UM policy.
Underinsured Motorist Coverage (UIM)
Underinsured motorist insurance (UIM) is not required in North Carolina, though it is recommended. If the at-fault driver’s insurance does not cover your bodily injury damages, UIM coverage can be applied to the remaining costs.
So, if we reverse the earlier example, where you are the injured driver with $40,000 of medical bills, but the at-fault driver only carries $30,000, then your UIM policy could cover the remaining $10,000.
What Happens If I Don’t Have Auto Insurance?
There are consequences for driving without proper car insurance in North Carolina. If your insurance lapses or if you don’t carry insurance at all, you will face civil penalty fines and license suspension. If you are a repeat offender, you could face jail time.
But the consequences don’t end there. If you cause an accident and don’t have insurance, you could be facing serious financial hardship. You would be personally held accountable for damages that could easily reach tens of thousands of dollars if not much more.
North Carolina Auto Insurance Protects Your Family & Finances
Having the right auto insurance coverage can protect you and your family from financial devastation. You don’t want one accident to drain your bank account, put you into debt, or leave you without a working vehicle. You may be inclined to minimize your auto insurance premium as much as possible but, remember, your premium is nothing compared to the costs resulting from car accidents.
To get the best North Carolina auto insurance at the best value, Contact Us today. ALLCHOICE is a local North Carolina insurance company that knows what it takes to protect you and your family on the road.