Last updated on April 26th, 2018
All drivers in the state of North Carolina are required by law to maintain a minimum amount of liability coverage on their vehicle in order for it to be legally driven on a public road. The state of North Carolina currently has these minimums set at $30,000 in individual bodily injury coverage, $60,000 in total bodily injury coverage and $25,000 in property damage coverage. Vehicle owners in North Carolina are free to purchase liability coverage that exceeds the above mentioned amounts, typically up to $1,000,000, but they cannot purchase less than the minimum amounts and still satisfy North Carolina car insurance requirements. As of January 1st, 2009 North Carolina residents are also required to maintain uninsured and underinsured motorist coverage in the same minimum amounts established for liability coverage. North Carolina is one of the few states in the country that operates under an at-fault car insurance system and still requires residents to purchase uninsured and underinsured motorist coverage as part of their car insurance policy. Like liability coverage, motorists generally have the option to purchase more uninsured and underinsured motorist coverage than the state requires though according to state car insurance law drivers cannot purchase more uninsured and underinsured motorist coverage than liability coverage. There are also a variety of optional types of auto insurance that are available to most drivers in the state, though not every insurance company will offer them all, and some insurance companies may only offer one or two. Personal injury protection is one of the forms of optional coverage that is generally offered by most auto insurance companies in North Carolina; though each company is allowed to determine just how much coverage they want to offer their customers. Personal injury protection functions in much the same way as bodily injury liability coverage except that it applies to the policy holder and passengers in the insured vehicle and not other parties involved in an accident. As a tort state the at-fault driver is supposed to be held financially responsible for any injuries sustained in an accident, which makes personal injury protection unnecessary in many cases, but personal injury protection can still be useful as a stop gap measure until fault is established or until the other insurance company steps forward to pay medical bills and it can also be used in an accident involving an at-fault driver that has no insurance.
Like a handful of other states North Carolina maintains an electronic database that allows them to monitor the auto insurance status of every vehicle registered in the state. Every time a policy is issued, renewed or terminated by an insurance company in North Carolina the company is required by law to immediately notify the state of such a change. This allows the state to proactively catch uninsured drivers as soon as they enter the system instead of waiting for them to be pulled over or involved in an accident. If a North Carolina resident is reported to the DMV for cancelling their policy or having their policy terminated they will receive a notice in the mail requesting verification of their insurance status. If the driver has indeed allowed their coverage to lapse they will be required to recertify with the DMV and pay a $50 fee within 10 days of receipt of the notice. If the insurance did not lapse the driver can simple fill out the form provided, known as a FS 5-7, with the correct insurance information and send it back to the DMV for processing. If a driver fails to reply to this notice altogether they will have their license and registration suspended for no less than 30 days and will be required to pay numerous fees in order to have their driving privileges reinstated.
In order to reduce the number of uninsured drivers on the state’s roads North Carolina law spells out exactly what will happen to a driver if they are caught driving without mandatory levels of liability coverage. The first time a driver is caught without insurance in North Carolina they will have their registration suspended or a minimum of 30 days. In order to have this suspension lifted and the license plates reinstated the vehicle owner will have to provide the DMV with proof of insurance on the vehicle and pay any necessary fees. Drivers that are found to be driving uninsured also run the risk of having their driving license suspended, which will also require the payment of numerous fees before it can be reinstated. North Carolina often places three pints on a driver’s license if they are found to be driving without insurance. Not only can the accumulation of points result in the suspension of the driver’s license but depending on the way an auto insurance company calculates its rates the driver may also see a corresponding hike in their monthly premium.
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