North Carolina law requires all drivers to carry liability insurance meeting minimum requirements, as well as uninsured / underinsured motorist coverage. Drivers can choose to increase their limits beyond the legal minimum as well as to add options to their car insurance policy for more coverage. North Carolina follows a traditional auto insurance system of fault determination and liability.
Mandatory Insurance Coverage
The state minimums for auto insurance are designed to ensure financial responsibility on the part of all drivers in the event of an accident. Liability coverage is designed to pay for injuries and damages caused by a driver who is at fault in an accident.
Every vehicle must be covered by a policy that meets the following minimums:
- Bodily Injury Liability in the amount of $30,000 per person and $60,000 per incident, to cover injuries to others in an at-fault accident.
- Property Damage Liability in the amount of $25,000 to pay for damage to another person’s vehicle or other property when you are found at fault in an accident.
- Uninsured/Underinsured Motorist coverage in an amount matching the minimum liability limits to pay for damages caused by a driver who is uninsured or whose insurance is inadequate to cover damages. This covers you and everyone in your vehicle and also provides protection against hit and run drivers.
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Optional Insurance Coverage
Drivers in North Carolina can increase their coverage by adding options and choosing higher liability limits than the legal minimum. Higher limits are often the first option drivers choose to improve their protection from the high cost associated with serious accidents.
In addition to choosing higher liability limits, North Carolina insurance companies also offer:
- Collision Coverage – This provides for repairs or replacement of your car in an at-fault accident. There is usually a deductible associated with this coverage.
- Comprehensive Coverage – This provides protection from the many risks to your vehicle that are not collision-related. This can include weather damage, theft, fire, and vandalism. Comprehensive coverage can also provide glass repair protection, and is generally subject to a deductible.
- Medical Payments – This coverage is available to provide extra coverage for medical payments and funeral services for you and anyone in your car.
- Additional Options – North Carolina auto insurers offer a wide range of additional coverage to allow drivers to create the policy that is right for their needs. Extra available coverage can include towing and labor, rental car reimbursement, and more.
Proof of Insurance Laws and Penalties
All drivers in North Carolina must not only carry insurance, but also be prepared to provide proof of their coverage. Insurance companies in North Carolina are required to notify the DMV when a policy lapses or is cancelled. The driver will then be notified that they have ten days to provide evidence of either sale or storage of the vehicle, or of a new insurance policy.
If there is a lapse in coverage, the state will charge civil penalties of $50 for the first offense within 3 years, $100 for the second lapse, and $150 for a third time. Drivers who do not respond within ten days to the notice will face a 30-day suspension of their vehicle registration and another fee of $50 for reinstatement.
In addition to the automatic notification of the DMV of a lapse in insurance, there are criminal penalties associated with driving uninsured.
Drivers must present proof of insurance upon request to a police officer. Driving without insurance is a misdemeanor that will result in charges; criminal courts will determine penalties that include fines, registration suspension, and even possible jail time. Penalties become harsher with each subsequent conviction in a three-year period.
Drivers who are involved in an at-fault accident while driving uninsured will not only face civil and criminal penalties for driving without insurance but can also be held responsible for damages caused. This includes bodily injury and property damage costs, for which the driver may face a lawsuit.
Buying Car Insurance in North Carolina
According to a 2017 Insure.com study, North Carolina ranks as one of the more affordable states for auto insurance, with an average annual rate of $1010 for the test vehicles used. North Carolina insurance companies develop their own rates based on the risk factors they choose, allowing drivers to shop around for competitive rates.
North Carolina’s Safe Driver Incentive Plan allows drivers who keep a clean driving record to receive lower rates, while those with accidents or violations will see higher rates. The plan uses a points-based system to determine how rate increases will be calculated. The more serious the violation, the more points will be assessed against that driver and the higher the rate increase will be.
To assist drivers with choosing a reputable insurance company, the North Carolina Department of Insurance provides insurance company complaint ratio information on their website.
High-Risk Driver Insurance
In order to make certain that all drivers are able to meet the legal financial responsibility requirements, North Carolina helps high-risk drivers through the Reinsurance Facility. Drivers who use this system to obtain coverage are those who have been unable to secure a policy in the open market due to serious problems with driving history.
Because the Reinsurance Facility is a last-resort choice, premiums tend to be high and coverage options are limited. While the policies allow all drivers to meet or exceed the minimum limits, they may not always provide all of the coverage options that are seen in standard policies, such as collision and comprehensive.
Teen Drivers in North Carolina
North Carolina uses a graduated licensing system for teen drivers similar to that used in most states. The program allows drivers to develop skills and practice on the road safely while working towards a full license. The graduated program begins at age 15 with a learner permit.
Limited Learner Permit
At 15, a teen can apply for a limited learner permit, which allows them to practice driving skills with supervision. To obtain the permit, the new driver must complete a driver education course and obtain a certificate.
The restrictions during this learning period are:
- An approved driver who has held a license for at least 5 years and is over 21 must be in the passenger seat at all times – approved drivers are parents, guardians, or someone appointed by a parent or guardian
- Driving is only permitted between 5 a.m. and 9 p.m. for the first six months
- The driver is prohibited from using any mobile device while driving, even hands-free
Limited Provisional License
In order to apply for the provisional license, a driver must be 16 years old and complete several steps:
- Hold a learner’s permit for at least 12 months
- Complete 60 hours of driving practice, at least 10 of which must be at night, certified by a supervising driver
- Have a clean record for the previous 6 months
- Pass a road test
Once the provisional license is obtained, there are still some restrictions that must be followed at all times. The teen can now drive without supervision, as long as they are in compliance with these rules:
- Unsupervised driving is only allowed between 5 a.m. and 9 p.m., except for work or religious reasons
- No more than one passenger under the age of 21 is permitted in the vehicle during unsupervised driving
- Use of a mobile device while driving is prohibited
Full Provisional License
After six months with the limited provisional license, the teen driver can graduate to a full provisional license, which allows unsupervised driving at any time. Drivers are still not permitted to use a mobile device of any kind while driving.
Full Unrestricted License
The graduated licensing program ends when the teen driver reaches the age of 18, at which point the provisional license can be turned in and a full, unrestricted license obtained.
All teen drivers are required to maintain a Driving Eligibility Certificate until they have completed high school. Teens under 18 in North Carolina who drop out of school before graduation will have their driver’s license revoked. A teen driver’s license can also be revoked if they are suspended from school for more than 10 days or moved to an alternative educational setting as a result of behavioral problems.
Liability insurance for teen drivers is required in North Carolina as soon as the teen receives a limited probationary license. This coverage can be obtained by adding the teen to a parent or guardian’s current car insurance policy until the teen is no longer a resident at home. Teens away at school can continue to be covered under a parent or guardian policy.
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