Auto Insurance NC Requirements: What Every North Carolina Driver Should Know

Auto Insurance NC Requirements

Every driver in North Carolina is required to carry auto insurance that meets the state’s minimum coverage requirements. These laws are designed to ensure that all motorists have the financial means to cover damages and injuries if they are involved in an accident. Understanding these requirements is essential for legal compliance and financial protection on the road.

Minimum Liability Insurance Requirements in NC

North Carolina law mandates that all registered vehicles carry liability insurance. This type of coverage helps pay for bodily injuries or property damage that the driver may cause to others. The minimum required liability limits in North Carolina are:

Bodily Injury Liability: $30,000 per person / $60,000 per accident
Property Damage Liability: $25,000 per accident

In addition to liability insurance, North Carolina requires drivers to carry uninsured motorist (UM) coverage. This ensures protection if you’re involved in an accident caused by a driver who does not have insurance or in the case of a hit-and-run. The UM coverage limits must match the minimum required liability limits.

What Liability Insurance Does and Doesn’t Cover

Liability coverage is designed to protect others when you’re at fault in an accident. It covers the following:

Medical bills for other parties injured in the accident
Property damage caused to vehicles, fences, buildings, or infrastructure
Legal defense fees if you are sued

However, liability coverage does not cover:

Damage to your own vehicle
Your own medical expenses after an accident
Losses from theft, vandalism, weather, or fire

To protect your own vehicle or health after an accident, you may need additional types of coverage beyond what the state requires.

Optional Coverage Available in North Carolina

While the minimum required coverage meets legal standards, it may not provide adequate financial protection in all situations. Many drivers choose to add optional coverages, including:

Collision Coverage: Pays for damage to your vehicle after a crash, regardless of fault
Comprehensive Coverage: Covers non-collision damage such as hail, theft, vandalism, or hitting a deer
Medical Payments (MedPay): Helps pay for medical expenses for you and your passengers
Underinsured Motorist (UIM) Coverage: Covers you if another driver is at fault but doesn’t carry enough insurance
Rental Reimbursement: Pays for a rental vehicle while your car is being repaired after a covered claim
Gap Insurance: Covers the difference between your vehicle’s value and your loan balance if it’s totaled

These additional protections can help drivers reduce their financial risk in the event of severe accidents, extreme weather, or other unexpected incidents.

Penalties for Driving Without Insurance in NC

North Carolina takes insurance compliance seriously. Driving without the required coverage can result in penalties such as:

Suspension of license plates and vehicle registration
A civil penalty (typically ranging from $50 to $150 depending on the offense number)
Reinstatement fees
Requirement to file an SR-22 certificate (a document proving insurance coverage)

The state verifies insurance coverage through the North Carolina Division of Motor Vehicles (NCDMV). If your insurance lapses, your insurer is required to notify the NCDMV, and you may face enforcement action unless proof of coverage is provided promptly.

What is an SR-22 in North Carolina?

While North Carolina doesn’t commonly require SR-22 filings for every driver, it may require one in certain situations such as:

DUI/DWI convictions
Reckless driving charges
License reinstatement after suspension

An SR-22 is not insurance itself but rather a certificate filed by your insurer that proves you carry the minimum required liability coverage. This filing may result in increased insurance rates or limited insurer options.

Tips for Staying Compliant with NC Insurance Laws

To remain compliant and avoid lapses or penalties, consider the following tips:

Always maintain at least the required liability and uninsured motorist coverage
Notify your insurance provider immediately when switching policies
Respond promptly to any correspondence from the NCDMV regarding insurance verification
Use auto-pay or calendar reminders to avoid accidental cancellations due to non-payment

Keeping your insurance active and properly documented will help ensure continuous coverage and uninterrupted registration status.

Learn More from the NC Department of Insurance

For official information about North Carolina’s auto insurance regulations, coverage laws, and consumer protections, visit the North Carolina Department of Insurance. This resource provides updated guidance on policy requirements and the rights of drivers throughout the state.

Whether you’re a new driver or simply updating your policy, understanding the core requirements of auto insurance in North Carolina is essential to staying compliant and protected on the road.