March 30, 2023


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North Carolina auto insurance laws

Car insurance is legally required in almost every state, including North Carolina. However, the specific car insurance laws in North Carolina are different from other states.

In North Carolina, getting caught without insurance comes with heavy consequences, like expensive fines. Fortunately, the car insurance laws in the Tar Heel State are straightforward and easy to understand.

Auto insurance laws in North Carolina

Drivers who are shopping for car insurance in North Carolina should review the auto insurance laws before purchasing a policy. That way, drivers can ensure they have enough coverage to meet state requirements and understand other laws they must follow. Here are the most relevant auto insurance laws in North Carolina:

  • Liability insurance: All drivers in North Carolina are required to have continuous liability insurance provided by a company licensed to do business in North Carolina.
  • Uninsured/underinsured insurance requirement: All drivers in North Carolina are required to carry insurance for uninsured/underinsured motorists.
  • Coverage lapse notification: North Carolina insurance companies are legally required to notify the state’s department of motor vehicles (DMV) if a driver’s insurance coverage is canceled or lapses for any reason.
  • Proof of insurance: All drivers in North Carolina must carry proof of insurance documentation in their vehicle at all times, and provide proof of insurance when requested by law enforcement.

Liability insurance in North Carolina

In North Carolina, drivers must carry liability insurance, which includes bodily injury liability coverage and property damage liability coverage, as well as uninsured/underinsured motorist coverage. Here is the amount of coverage that is required in the state:

  • $30,000 in bodily injury liability coverage per person
  • $60,000 in bodily injury liability coverage per accident
  • $25,000 in property damage liability coverage per accident

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.

Most insurance companies 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 risk.

Is North Carolina a no fault state?

North Carolina is not an at-fault state. That means when someone gets into an accident, the at-fault driver’s insurance company is responsible for paying the other driver’s medical bills and lost wages. In at-fault states, like North Carolina, a driver’s insurance company automatically pays for their medical expenses after an accident, regardless of who caused the crash.

Penalties for driving without insurance in North Carolina

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 within 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 restoration fee. For a second offense, a driver will pay $100, and all subsequent insurance lapses come with a $150 fine.

Auto insurance coverage options in North Carolina

Getting car insurance in North Carolina is a fairly simple process. After choosing an insurance company, drivers can get a quote and apply for a policy. Before signing the policy, drivers will decide if they want minimum coverage or full coverage insurance. In addition to basic coverage, there are several add-on policies that will benefit drivers in North Carolina:

  • Roadside assistance: Roadside assistance covers basic vehicle repairs, towing, battery services, fuel delivery and extrication if a vehicle breaks down.
  • Gap insurance: After an accident, gap insurance covers the difference between a vehicle’s value and the remaining balance on the loan.
  • New car replacement coverage: New car replacement coverage will pay for a new car if the policyholder’s vehicle is totaled in a covered accident.

Frequently asked questions

What is the best car insurance company?

The best car insurance company is different for every driver. For instance, some drivers care about great customer service and others care more about getting the cheapest rate. Some of the best car insurance companies are Amica, Allstate, Nationwide and USAA.

Is car insurance required in North Carolina?

Yes, car insurance is legally required in North Carolina. Drivers must carry at least 30/60/25 coverage, which translates to $30,000 in bodily injury liability coverage per person, $60,000 in bodily injury liability coverage per accident and $25,000 in property damage liability coverage per accident. Drivers must also carry uninsured/underinsured motorist coverage.

How much does car insurance cost in North Carolina?

In North Carolina, the average cost of full coverage car insurance is $1,308 per year, and the average cost of minimum coverage car insurance is $396 per year.