Image via Flickr by wuestenigel
North Carolina requires all drivers to carry minimum liability insurance to drive on the roads legally. Automobile insurance is an unavoidable expense when using a vehicle to get to work or enjoy road trips. You need to include it in your total vehicle budget with fuel and upkeep. Knowing the different types of coverage will also help you determine how much insurance coverage you want to carry. At the minimum, you need to have liability insurance in North Carolina on your vehicle at all times.
What Is Liability Insurance in North Carolina?
Liability insurance coverage has two main components: bodily injury and property damage. The bodily injury liability insurance will cover any injuries sustained by another person in an automobile accident you cause. This coverage can be used on medical bills, X-rays, surgery, and more. Property damage liability will cover any damage done to another person’s vehicle or other personal property in the accident. The minimum requirements for liability insurance in NC are as follows:
- Bodily injury liability of $30,000 per person or $60,000 per accident
- Property damage liability of $25,000 per accident
These are the minimum requirements issued by the state to drive your vehicle in North Carolina. You may want to consider carrying more than the bare minimum because $25,000 doesn’t cover much for property damages. Vehicles today cost more, sometimes upwards of $25,000, and $30,000 per person on medical bills can disappear quickly with a severe injury. If your insurance coverage doesn’t cover the total costs of bodily injury or property damage, you can be held liable for the remaining expenses.
Most insurance providers will recommend that you carry $100,000 per person and $300,000 per accident of bodily injury liability and $100,000 of property damage liability to adequately cover yourself and your assets in the event of an accident.
What Are the Other Types of Insurance Coverage in North Carolina?
Including liability, there are five main types of insurance coverage for your automobile in North Carolina. The other four types of insurance are as follows:
Uninsured and Underinsured Motorist Coverage
If you’re involved in an accident with another driver who either carries zero insurance or the bare minimum, your uninsured and underinsured motorist coverage will step in to cover the costs. This type of coverage can include both bodily injury and, in some cases, property damages. For example, if you’re in an accident and your medical bills are $50,000, and the at-fault driver only carries the minimum liability insurance in NC. In this case, your underinsured motorist coverage would cover the other $20,000 of medical bills.
If your vehicle is damaged by hail, vandalism, theft, fire, or other natural disasters, your comprehensive insurance will cover the cost of your vehicle up to its actual value. This type of insurance is usually required if you have a lien against your vehicle. Banks and other lending institutions will require it to protect their investment. Comprehensive coverage will have a deductible, which you pay out of pocket towards the damages. You can set your deductible amount, and typically, a higher deductible equals a lower insurance premium.
Collision coverage covers the cost of your vehicle to its actual value in the event of an accident with another vehicle or object, such as a fence or pole. Collision is also typically required by banks and lending institutions if you take out a lien on your vehicle. It also has a deductible, which you can set as a higher deductible to lower your rates.
The final optional insurance coverage offered in North Carolina is medical payments. If anyone in your vehicle is injured in an accident, this coverage will pay for the medical or funeral expenses.
What Are the Penalties for Not Having the Minimum Liability Insurance in North Carolina?
The North Carolina Department of Motor Vehicles strictly enforces the minimum liability insurance law. When you let your liability insurance lapse, fail to renew it, or cancel it, your insurance provider is legally required to notify the state. The NCDMV will then send a liability termination notice to the registered owner. The owner has 10 days from the date printed on the notification to respond. Penalties for driving without the minimum liability insurance in NC are:
- First offense. $50 fine and you will be on probation for one to 45 days.
- Second offense. $100 fine and you will have probation or jail time for one to 45 days.
- Third and subsequent offenses. $150 fine and probation or jail time for one to 45 days.
You will also have your registration suspended for 30 days for each offense and have to pay $50 to have your license reinstated.
What Are the Best Car Insurance Providers in North Carolina?
When purchasing automobile insurance for your vehicle, it’s essential to shop around, as prices will vary significantly amongst providers. Bankrate analyzed average premiums, focusing on coverage, policy features, discounts, and customer satisfaction scores from J.D. Power to come up with a list of the top five automobile insurance providers in North Carolina. The top five car insurance providers are:
- Geico with a Bankrate score of 4.7, the average annual premium for full coverage of $835, and J.D. Power customer satisfaction score of 843/1000
- State Farm with a Bankrate score of 4.7, the average annual premium for full coverage of $958, and J.D. Power customer satisfaction score of 859/1000
- Nationwide with a Bankrate score of 4.4, the average annual premium for full coverage of $1,374, and J.D. Power customer satisfaction score of 831/1000
- Allstate with a Bankrate score of 4.0, the average annual premium for full coverage of $1,633, and a J.D. Power customer satisfaction score of 838/1000
According to Bankrate, in 2022, the average annual premium for minimum liability coverage in NC is $413, while the average yearly premium for full coverage is $1,325.
As you can see, the difference in premiums can be substantial, so it’s essential to shop around when purchasing liability insurance in North Carolina. You can have an insurance agent run your coverage with varying limits and with and without optional insurance to find the best coverage for your needs. You can also ask if they offer any discounts that you may be eligible for to save even more money.
At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.