Do I Need North Carolina Auto Insurance?
North Carolina Auto Insurance is something that most individual residents of North Carolina must have. The problem that many NC Residents face is a lack of understanding of what coverages are, and what coverages are needed. The North Carolina Financial Responsibility Laws require that Automobile Liability coverage be maintained. The minimum coverage requirements are as follows:
- $30,000 Bodily Injury Per Person / $60,000 Bodily Injury Per Accident
- $25,000 for Property Damage
Additionally, North Carolina now requires that all licensed drivers carry Uninsured/Underinsured Motorist Coverage at least equal to the highest liability limit on any one vehicle insured under the policy. Now that you know what the law requires…let’s take a better look at the actual coverages available on a North Carolina Auto Insurance Policy.
BODILY INJURY LIABILITY
Bodily Injury Liability coverage will pay for damages to other people’s property as a result of an accident caused by you or another covered driver. Here are some examples of damages covered under the Bodily Injury Liability of your policy:
- Medical Expenses
- Law suit settlements & Legal Fees
So What Limits Do I Need? That is the question that only you can answer with the help of you Agent. When speaking with customers, this is a story that is often used at ALLCHOICE. You are involved in an accident (which is your fault). You ran a stop light and struck another car that contained three (3) people. All three people were injured and taken to the hospital. The driver suffered numerous injuries, including a broken arm. The other passengers all sustained minor injuries. It is possible that North Carolina’s minimum Bodily Injury Limits would pay for the hospital bills (lets assume they did). However, the driver (who suffered a broken arm) just happens to be Brain Surgeon!!! How much would a simple month away from his occupation cost in terms of lost wages? Are those minimum liability limits still sufficient?
PROPERTY DAMAGE LIABILITY
Property Damage Liability will pay for damages to other people’s property as a result of an accident that is caused by you or another covered driver. Here are some examples of damages covered under the Property Damage Liability of your policy.
- Vehicle Repair
- Vehicle Actual Cash Value
- Damage to other Real Property
So What Limits Do I Need? That is the question that can only be answered by you with the help of your agent. Let’s continue with our same hypothetical accident from “Bodily Injury”. The Brain Surgeon that you hit was driving a 2009 Mercedes CLS550 (Sticker Price $70,000 +). North Carolina requires you carry a minimum of $25,000 Property Damage Liability. That leaves a very large shortfall ($70,000 – $25,000 = $45,000) between what your insurance will pay for and what you will have to pay “out of pocket”! Are those minimum liability limits still sufficient?
Collision means physical damage to YOUR covered vehicle caused by an impact with another vehicle or object. Collision Coverage will pay the lesser of the cost of repair or the ACV (Actual Cash Value) of your automobile. Collision Coverage is an optional coverage under the North Carolina Auto Insurance Policy. However, you may be required to carry Collision Coverage if you have financed your vehicle.
COMPREHENSIVE COVERAGE (OR OTHER THAN COLLISION)
Comprehensive Coverage pays the cost of repair of ACV of your automobile when damage is caused to your covered vehicle by something “other than collision”. Here are some examples:
- Theft or Larceny
- Contact with an animal
Comprehensive Coverage is an optional coverage under the North Carolina Auto Insurance Policy. However, you may be required to carry Comprehensive Coverage if you have financed your vehicle.
Medical Payments Coverage pays for reasonable expenses (medical or funeral) due to an automobile accident. Who is covered?
- You or any family member while occupying any automobile, or as a pedestrian when struck by a motor vehicle
- Any other person while occupying your covered automobile or any vehicle driven by you or a family member
Medical Payments Coverage is an optional coverage under the North Carolina Auto Insurance Policy.
UNINSURED/UNDERINSURED MOTORISTS COVERAGE (UM/UIM)
Uninsured Motorist coverage provides protection for YOU when an uninsured driver injures you or another covered individual (when that driver is at fault). This coverage also provides protection for damage to YOUR property. Underinsured Motorists coverage provides protection when an underinsured driver causes injury to a covered individual (when that driver is at fault). An underinsured driver is defined as one whose limits of liability are less than your UIM Limits, and not enough to cover losses of the people the underinsured driver injures.
TOWING AND LABOR
Towing & Labor Coverage pays for towing and labor costs each time your covered automobile or any non-owned automobile is disabled or the keys are lost, broken or accidentally locked in the car.
EXTENDED TRANSPORTATION EXPENSE COVERAGE (RENTAL REIMBURSEMENT)
This coverage will pay transportation expenses incurred by you or loss of use expenses for a non-owned vehicle for which you become legally responsible.
The North Carolina General Assembly, in an attempt to reward safe drivers with the lowest possible insurance rates, enacted the North Carolina Safe Driver Incentive Plan (SDIP). Drivers with moving traffic violations and/or at fault accidents will be charged higher premiums respective to their individual driving records. Currently, SDIP Points are charged on a policy for a period of three (3) years. Click here for more information about SDIP Points.
INEXPERIENCED OPERATORS / YOUNG DRIVERS
An Inexperienced Operator is any driver who has less than three (3) years of driving experience. The Inexperienced Operator Surcharge is based on a sliding scale to adjust the surcharge accordingly for each year of driving experience the operator obtains. While most people associate the Inexperienced Operator with a driver getting his or her license at 16, this is not the case. The surcharge is not based on attained age of the driver. A 65 year old person who is just getting his or her license for the the first time will pay the same surcharge as that charged to a 16 year with the same driving experience.