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Understanding North Carolina’s Required Car Insurance

By September 10, 2020April 11th, 2024No Comments

Like most states, North Carolina requires registered drivers to carry auto insurance. Those who fail to do so might face significant penalties. While getting the required coverage is enough to let you drive legally, it might not be enough to make you entirely secure behind the wheel. You need to understand how this coverage works and why you might need more expansive protection.

Why Does North Carolina Require Car Insurance?

Driving is a dangerous business, even for the safest drivers. Even vehicle ownership itself can be costly, too. After all, whether you have a wreck or your car gets damaged by a falling limb in your driveway, the damage might be expensive. Car insurance is the benefit that can help you pay for your own damage following hazards like these.

However, under North Carolina law, drivers who cause accidents (meaning they are at fault for them) are legally responsible for paying for the damage done to other parties.

For example, if you back into a building, then you will repay the owner for the property damage using your car insurance. Or, if you hit another vehicle, then you must use your coverage to compensate the other driver and their passengers for their injuries.

Because any driver might be at fault for an accident at any time, the law also mandates drivers to carry certain car insurance. The portions of the coverage that you must carry are the ones that help you meet these mandates.

North Carolina’s Required Coverage

North Carolina requires at least the following coverage limits from all drivers:

  • $30,000 bodily injury liability coverage per person
  • $60,000 bodily injury liability coverage per accident
  • $25,000 property damage liability coverage

Additionally, drivers will either have to carry uninsured motorist coverage or both uninsured motorist coverage and underinsured motorist bodily injury coverage. Depending on the limits you choose for your liability coverage, your requirement will vary.

  • If you carry only the minimum required liability coverage, then you must carry uninsured motorist coverage with 30/60/25 limits.
  • Drivers who carry more than the required liability coverage will have to carry both uninsured and underinsured coverage.

Understanding Each Portion of Coverage

Each part of the state-required coverage can provide different benefits if you ever have to make a claim on your policy.

  • Liability Insurance

Liability coverage is also called at-fault insurance. It is the coverage that compensates other parties when the accident is your fault. It does so because these costs might financially devastate drivers who have to pay out of pocket.

Most policies contain split limits for bodily injuries and property damage. Under the minimum bodily injury liability coverage, your policy will pay up to $30,000 if you are liable for only one other party’s injuries. It will pay up to $60,000 if more than one person gets hurt. However, the $30,000 per person limit will still apply.

Property damage liability insurance is the coverage that will pay for damage to another driver’s vehicle or other property when the accident is your fault. Under the minimum coverage, that party can claim up to $25,000 from your policy.

  • Uninsured Motorist Coverage

Sometimes, a driver might become a victim of a hit-and-run accident or get hit by someone who has no auto insurance. If the accident was an uninsured or unknown driver’s fault, then the affected party won’t have a way to pay for their damage using the at-fault party’s liability insurance. Uninsured motorist coverage can step in to pay for the damage or injuries of the policyholder. It will offer coverage on your own policy that another party cannot.

  • Underinsured Motorist Bodily Injury Coverage

At times, another driver might be at fault for a wreck. However, you might find that they don’t have high enough liability limits to repay you for the injuries you sustained. Underinsured motorist coverage will allow your own policy to pay for your injuries after that person’s policy pays up to its limits. Underinsured motorist coverage does not cover property damage.

Do I Need More Coverage?

When thinking about your car insurance needs, remember that buying the minimum coverage might not provide you with expansive protection against all the costs of wrecks. Therefore, you should consider adding additional protection into your policy, including:

  • Higher liability & uninsured/underinsured coverage limits to protect you against very expensive at-fault accidents.
  • Collision insurance that pays for damage to your car following wrecks.
  • Comprehensive coverage pays for damage to your car from hazards other than collisions. It might pay for fires, theft, vandalism, severe weather or animal strikes.
  • Medical payments coverage will cover your medical bills and those of your passengers if you get hurt in a wreck.

Each portion of this coverage will have its own limits. Deductibles will also apply to certain claims. However, your insurance agent is happy to help you expand your coverage in a way to offer substantial benefits in case of the costliest car accident losses.

Also Read: How Wrecks Affect Your Car Insurance Rates


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