Car insurance is one of those things that you can’t avoid buying if you want to be a responsible driver. Like most states, the state of North Carolina requires all drivers to be properly insured if they want to legally operate a vehicle.

If you are planning to move to the North Carolina in the near future, or if you are just looking to switch car insurance companies, you will need to know what the state laws are surrounding car insurance limits and policies.

Every state has different requirements, so it’s important to do your research before hitting the road. Here are some of the basic things to know about car insurance in North Carolina.

North Carolina Car Insurance Requirements

The purpose of car insurance is to protect ourselves and other drivers from the financial hardship that could bog us down following a car accident. Medical bills and car repairs can be expensive, so the best way to avoid draining your life savings is to have good car insurance.

The state of North Carolina expects all drivers to be able to cover the costs of damages or injuries caused by a car accident, should one occur. To make sure that this is a reality for all North Carolina drivers, the state requires that all drivers have liability insurance on their policy.

Here are the minimum liability coverage limits that North Carolina requires you to have:

  • Bodily injury liability: $30,000 per person, per car accident or $60,000 total per accident.
  • Property damage liability: $25,000 per car accident.
  • Uninsured motorist coverage bodily injury: $30,000 per person per accident.
  • Uninsured motorist coverage property damage: $25,000 per accident.

Uninsured motorist coverage exists to protect you in incidences of a car accident where the other driver is at fault but doesn’t have substantial insurance coverage to pay for the damages. It isn’t always a requirement in every state, but North Carolina is one of the states that mandates this type of coverage.

Other Types Of Car Insurance

Everybody’s situations are different when it comes to finances and personal needs. If the state’s minimum insurance requirements don’t cut it for you, you have other options for coverage that you can add to your policy as well. Here are some of the other more common types of coverage that you can add to your policy:

  • Collision insurance: Collision insurance is there to protect you if you get into an accident with another driver.
  • Comprehensive insurance: This type of insurance coverage is there to assist you if your car suffers from damages that are not related to a car accident. This may include damage caused by theft, vandalism or bad weather.
  • Towing and labor: If you are ever broken down on the side of the road, this type of insurance coverage is there to save you in a pinch.
  • Rental car: Let’s say your car gets damaged and is need of maintenance for a prolonged time period. This type of insurance will help you get a rental car for you to use in the meantime.

Please note that while North Carolina does not require you to have collision and comprehensive coverage on your plan, you will most likely still need to purchase them if you are financing or leasing your car.

Safe Driver Incentive Plan

The more careful drivers we have on the roads, the less accidents we’ll have to endure. In an effort to try to keep North Carolina drivers at the top of their game, the state uses a program called the Safe Driver Incentive Plan (SDIP). The SDIP is a point system that penalizes unsafe drivers by raising their insurance rates.

Drivers will get points for traffic violations and for being the at-fault party in a car accident. The more drastic the violation, the more points the driver will acquire against them. Every time your points increase, your car insurance premium will follow suit. To put it in perspective, just one point can cause your insurance costs to increase by 30%.

As the age old saying goes, it is definitely better to be safe than sorry.

North Carolina Reinsurance Facility

Since car insurance is required by North Carolina law, it wouldn’t make sense to allow for companies to refuse insurance to anyone in the state. For this reason, it is illegal for car insurance companies to turn down customers for liability insurance. That being said, there is still such a thing as a high-risk driver.

High risk drivers are drivers who have a driving record that is below par. This type of driver can make car insurance companies nervous because there is a high chance that they will become expensive to the company in the long run. For this reason, they will usually have to pay much higher premiums than a driver who hasn’t been in as much trouble.

This is where the North Carolina Reinsurance Facility (NCRF) comes in. If you have been deemed a high-risk driver, an insurance company through the NCRF can choose to insure you. This organization is beneficial for both the drivers and the insurance company because it allows for the companies to share the risk amongst each other, while being protected through the NCRF.

Even though high-risk drivers will end up paying higher premiums through the NCRF than they would if they had been a safe driver, it is most likely going to be cheaper to go through the organization.

The NCRF has a set of maximum coverage limits for their policyholders in order to mitigate risk:

  • Bodily injury liability: $30,000 per person, per car accident.
  • Bodily injury liability: $60,000 total per car accident.
  • Property damage liability: $25,000 per car accident.
  • Coverage limits for medical payments and uninsured drivers vary by policy.

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