To register a car and maintain the registration in North Carolina, you must carry a minimum amount of liability insurance and uninsured motorist coverage of the amount 30/60/25. Under the Vehicle Financial Responsibility Act of 1957, the NC government requires that a driver who is at-fault for an accident be able to pay for the damages and bills arising from the crash. There are also several other alternatives to an insurance policy that you may satisfy in lieu of a car insurance policy.
While on the road, you must always carry your insurance ID card in case you are ever requested to present it. An insurance binder, a copy of your policy’s declaration page, or a DL-123 certification from your insurance agent may suffice as well.
|North Carolina Required Car Insurance Coverage||NC Required Min. Limits|
|Bodily Injury (BI)||$30,000 per person / $60,000 per accident|
|Property Damage (PD)||$25,000 per accident|
|Uninsured Motorist Property Damage (UMPD)||$25,000 per accident|
|Uninsured Motorist Bodily Injury (UM/UIMBI)||$30,000 per person / $60,000 per accident|
North Carolina Car Insurance Minimum Requirements
A minimum North Carolina car insurance policy includes liability insurance and uninsured motorists coverage. While liability insurance makes sure you are financially able to pay anyone you harm or the damage you cause in an accident, uninsured motorist coverage gives you the same protection if you were involved in an accident caused by an uninsured driver. The minimum limits that you must purchase for liability insurance coverage, as stated by the Motor Vehicle Safety and Financial Responsibility Act of 1953, are as follows:
Bodily Injury (BI): up to $30,000 per injured person, for a total of $60,000 for two or more people in one accident. Your BI pays the other driver and his or her passengers, if any, for any medical expenses arising from the accident that YOU are found to cause. You can usually find higher limits up to 100/300 in North Carolina, and even higher, depending on the insurer.
Property Damage (PD): up to $25,000 in total per accident, for any damage to other people's property that resulted from the accident you caused. Higher limits are usually available; this varies by insurer.
Uninsured Motorist coverage (UM): kicks in whenever the accident involves a driver who is either uninsured or underinsured, and pays you as if your company were their insurer. Under normal circumstances, you would be receiving payments from the other driver’s BI and PD coverage when he or she is at-fault. With UM protection, your own insurer assumes the place of the uninsured driver's company and pays you out.
There are two components to UM: bodily injury (UMBI) and property damage (UMPD). You need to purchase UMBI and UMPD in at least the same limits as your liability coverage (30/60/25), but if you op to buy higher UMBI limits, you'll then be required to get a combined UMBI and Underinsured Motorist BI coverage in North Carolina.
- Uninsured Motorist Property Damage (UMPD): at least $25,000 required, and covers your property damage in an accident caused by an uninsured driver. You may purchase higher limits, but they may never be higher than your regular PD limits; the highest possible coverage you can buy in North Carolina for UMPD is $1 million. However, note that if you are covered by multiple auto insurance policies, NC allows your total amount of coverage to be the sum of every policy’s UMPD limits.
- Uninsured Motorist Bodily Injury (UMBI): required when you are only purchasing the minimum limits (30/60), and covers your bodily injury medical bills from an accident caused by an uninsured motorist.
- Uninsured/Underinsured Motorist Bodily Injury (UM/UIMBI): when you have BI limits higher than the state minimum, and decide to raise your UMBI limits to match it, you will then have to purchase the UM/UIMBI coverage. The Underinsured Motorist coverage kicks in when you have exhausted the other driver’s BI limits, and fall into one of these scenarios:
- The at-fault driver’s BI limits are lower than your UM/UIMBI limits
- The total medical payments you receive from the other driver’s BI are less than your UM/UIMBI limits
- The at-fault driver’s BI limits are lower than your total combined UM/UIMBI limits of different policies
Optional Car Insurance Coverage in North Carolina
A minimum insurance policy in North Carolina pays what's due to the other driver and shields some of your assets when you cause the accident. However, the minimum coverage in North Carolina does little when it comes to your own medical care. You may be left with a sizable bill for your own injuries and repair. Here are three optional coverages that pays for your expenses:
Collision: pays for damage to your car that results from a collision, such as hitting another car or running into a street light. The limit of your coverage will be based on the market cash value of your insured vehicle. There is also a dollar deductible amount that you need to pay out-of-pocket per accident before your insurer picks up the bill. Deductibles usually range between $50 and $2,000, and vary slightly across insurers.
Comprehensive: sometimes called other-than-collision coverage, Comprehensive pays for your car's physical damage from most other kinds of incidents (ex: hail, tree branches falling, etc). Similar to Collision, you will need to select a deductible, which will be reflected in your coverage premiums.
Medical Payments: this coverage pays for all necessary medical expenses, such as ambulance, hospital, surgeries, and rehabilitative services, up to a limit per accident. In the event that an insured person dies from the accident, it will also pay the funeral expenses. Both you and any passenger or family member of yours would be covered in NC, regardless of who is to blame for the accident. The total amount (your limit) you can claim can range anywhere between $500 and $10,000; this varies by insurer. While sme motorists may find this redundant health insurance, note that your health insurance will not cover funeral expense.
Alternative Proof of Financial Responsibility in North Carolina
The Act of 1957 mandates all drivers to carry some form of liability insurance as proof of financial responsibility, and an insurance policy is the easiest way to satisfy the requirements. However, if you would rather not have a policy, North Carolina gives you alternative options. When you fulfill at least one of the below, the Commissioner of Motor Vehicles will issue you a certificate of insurance:
Surety Bond: by submitting a surety bond $85,000 in value issued by a licensed North Carolina surety company, you'll get a certificate from the Commissioner. The bond is your guarantee that you will make all the necessary payments whenever there is a judgement against you, much like an insurance company would under a minimum liability policy. In the event that you cannot fulfill this promise, the surety company will pay in your place, then collect from you later.
Real Estate Bond: you can prove your ability to pay by submitting a real estate bond approved by a county superior court clerk. Specifically, the real estate bond is a guarantee of payment up to $85,000 per accident, signed by two other individuals who own real estate in North Carolina who own combined equity worth at least $170,000 in total. If you fail to make the necessary payments, the Commissioner will take the other people's MC real estate to make good on your liability.
Cash/Security Deposit: by making a $85,000 deposit with the State Treasurer, you can earn a certificate from the Commissioner. The deposit may be made in either cash or acceptable types of securities, such as government bonds or notes, which the Commissioner will take to satisfy any judgement arising out of an accident you cause.
Self-Insurance: if you either own or lease a total of 26 cars or more registered under your name, you may apply with the Commissioner to become a self-insurer. The Commissioner will ask for documents that can prove your financial standing – such as income statement and/or financial statement – and will issue you a certificate if he or she is satisfied. In other words, you need to demonstrate continuing financial ability to satisfy any payments for accidents involving one or more of the vehicles covered under your self-insurance.