If you want to learn about auto insurance in North Carolina, we’ve got all the information you need right here. Read on as we break down required types of coverage in North Carolina, penalties for driving uninsured, important coverage decisions, how the pricing system differs from other states, and more.

Mandatory insurance law

North Carolina is a “tort” state where state law requires all drivers to have insurance.

Minimum North Carolina coverage requirements

North Carolina law has certain standards for car insurance policies. Every policy sold in North Carolina must provide liability coverage and uninsured coverage. The following table breaks down the requirements.

Required coverage types Minimum amount of coverage
Bodily injury liability $30,000 for each person’s injuries in an accident
$60,000 total for all injuries in an accident
Property damage liability $25,000 total per accident
Uninsured/underinsured motorists bodily injury $30,000 for each person’s injuries in an accident
$60,000 total for all injuries in an accident


When someone driving your car causes an accident, it pays for victims’ medical and repair bills. However, it only pays up to a certain amount. Minimum policies include $60,000 worth of coverage for medical bills and $25,000 for property damages. If you get the minimum amount of liability insurance, you may see it referred to as 30/60/25 coverage. You can buy more than the minimums to be better protected.

Remember, liability doesn’t cover the driver’s medical bills or car repairs. They only cover those expenses for victims of an accident.

According to the state’s Consumer Guide to Automobile Insurance, liability insurance also includes supplementary payments coverage. After an accident, it’ll help pay for bills like:

  • Bail, appeal, and release bond expenses
  • Lost wages for attending court dates at your insurer’s request
  • Emergency first-aid costs for others at the scene of the accident
  • Taxes and interest from court judgments

Uninsured motorist (UM) bodily injury

Pays accident-related medical bills for people covered by your policy when they are injured in an accident caused by an uninsured driver. Minimum policies include $60,000 worth of coverage total for all medical bills, but you can buy more.

If you buy more than the minimum amount of coverage, you will also have to buy underinsured motorist (UIM) coverage, according to officials. Read more about UIM coverage in the “Optional Coverages” section below.

Penalties for driving uninsured

If you break the law and don’t buy coverage, it could cost you. You could get stuck having to pay other people’s medical and repair bills if someone crashes your car. You could also get your registration suspended. On top of that, you could have to pay hundreds of dollars in fines and fees.

Number of Offenses Fine License & Registration Suspension
1st $50 Until you prove you’re insured & pay $50 reinstatement fee
2nd $100 Until you prove you’re insured & pay $50 reinstatement fee
3rd & subsequent $150 Until you prove you’re insured & pay $50 reinstatement fee

Coverage considerations

Optional coverages

In addition to the required liability coverage and uninsured motorist coverage, there are optional coverages you can add. They’ll raise the cost of your insurance, but they’ll also provide greater protection. The following are the most widely available coverage add-ons in the state.


It pays for repairing or replacing the insured car if it’s damaged by something other than a collision. Some examples of this type of damage are vandalism, hail damage, and theft. In 2011, 3 out of every 4 drivers in North Carolina bought this coverage, according to data from the National Association of Insurance Commissioners (NAIC).


It pays for repairing or replacing the insured vehicle after an accident. In 2011, more than 3 out of every 5 drivers bought this coverage, according to data from the NAIC.

Underinsured motorist (UIM) bodily injury

It pays for you and your family’s accident-related medical bills if the driver who caused the accident had insurance, but not enough to cover all of the medical bills from the accident.

If you buy more liability coverage than what’s required by law, this coverage will automatically be included in your policy.

Uninsured motorist (UM) property damage

You can purchase uninsured motorist coverage that pays for your car repairs after an accident. It does so when the driver who caused the accident has no insurance.

Medical payments

It pays your accident-related medical and funeral bills. It also does so for your family members and passengers. It provides coverage no matter who caused the accident.

Death, specific disability, and total disability

It pays for death, dismemberment, specific disability, and total disability from an accident.

Rental car coverage

It covers you or a family member when driving a rental car for up to 22 consecutive days.

Custom equipment

It pays for non-factory parts damaged in an accident. Covered parts include some electronics and custom equipment.

Rental reimbursement (extended transportation expenses)

It pays for your transportation bills when your car is out of commission.

Towing and labor

It pays for towing and labor due to a mechanical breakdown.

Protection from drivers without insurance

Statewide, about 14% of motorists drive without insurance, according to the latest report from the Insurance Research Council. That rate is right around the national average of 13.8%.

So if someone crashes into you, you have around a 1-in-7 chance that he or she doesn’t have insurance. That means they won’t be able to pay for your accident-related damages.

If someone who injures you in an accident doesn’t have insurance, you may need to rely on your own policy. North Carolina requires uninsured motorist coverage, so you’ll have $30,000 worth of coverage for each person’s medical bills and $60,000 worth of coverage for all medical bills total. North Carolina also offers medical payments coverage that’ll help you with those bills.

But you might not have coverage for car repairs. The following optional coverages will pay for repairing your car if it’s damaged by an uninsured driver:

  • Uninsured motorist property damage
  • Collision

If you don’t have any of the coverages listed here, you might not be able to get your property damages covered.

North Carolina auto insurance rates

North Carolina enjoys pretty cheap rates for car coverage. The average cost of a North Carolina auto insurance policy was 22.3% cheaper than the 2011 national average, according to data from the NAIC. That makes it the state with the 8th-cheapest costs in the U.S.

Cheap premiums in Raleigh & Charlotte

Statewide premiums are lower than the U.S. average. But in two North Carolina cities, premiums are especially low. According to a Runzheimer International study, Raleigh and Charlotte have some of the cheapest insurance costs in the U.S.
Raleigh was the 2nd-cheapest city for average annual auto premiums in the U.S. Charlotte was the 5th-cheapest city.

Usage-based discounts

If you drive safely, infrequently, or both, you may want to look into a usage-based discount program. These programs use a device you install in your car to track how far it’s driven and/or if it’s driven safely. Depending on how you drive, you could potentially get a discount of up to 30%.

How claims & tickets affect your premiums

The way claims and traffic tickets affect your premiums in North Carolina is different from any other place in the country. Instead of insurers, regulators decide how much your premium will increase if you get into an accident or get a ticket.

This system is called the North Carolina Safe Driver Incentive Plan (SDIP), and it ensures that unsafe drivers and safe drivers alike pay the rates they deserve. It has been in place for over 50 years.

Under the plan, if you’re convicted of a moving violation or responsible for an accident, you get “insurance points” added to your record. More points mean higher prices.

For a conviction or accident to count, they’ll have to have occurred within 3 years before the policy was first issued or renewed.

Officials offer the following chart to show how points can affect your premiums:

Points Size of rate increase Dollar increase if you were paying $300 with 0 points
1 30% $90
2 45% $135
3 60% $180
4 80% $240
5 110% $330
6 135% $405
7 165% $495
8 195% $585
9 225% $675
10 260% $780
11 300% $900
12 340% $1,120

The following table shows some examples of the types of incidents that will get you SDIP points. We only include one example per point level. Check out the SDIP brochure for a full list.

Points Example of violation/accident
1 Speeding up to 10 mph over the limit if the limit was 55 mph or lower
2 Driving on the wrong side of the road
3 Causing an accident that left at least $3,000 in property damages
4 Causing a hit-and-run with no injuries
8 Aggressive driving
10 Highway racing
12 Driving with a blood alcohol level of 0.08 or more

The state’s insurance commissioner puts it this way:

“Think about this the next time you are behind the wheel: if you cause an automobile accident or are convicted of a moving violation, you’ll pay for it!”

A different kind of pricing

North Carolina does it differently when it comes to setting car insurance rates. Basically, the North Carolina Department of Insurance has more sway over rates than regulators in other states do.

Every year, insurance companies in North Carolina write up a proposal together about price changes they are planning. The proposal goes to North Carolina Rate Bureau, then to the state insurance commissioner for review.

Supporters of North Carolina’s pricing system say it stabilizes prices. Opponents, like Fair Automobile Insurance Rates for North Carolina, say it narrows choices for drivers and discourages competition for car insurers.

In February 2014, the bureau’s proposal contained no change in auto insurance rates in North Carolina.

How claims work in North Carolina

North Carolina uses a “tort” system for car insurance claims. That means if someone injures you or wrecks your car, their liability insurance pays your medical and repair bills.

But in some cases, the other driver won’t be 100% responsible for the accident. Your actions could have contributed to the accident, and you could be partially responsible. This makes things a little more complicated.

North Carolina uses “pure contributory negligence” to sort this out. That means if you have any fault in an accident, the other driver’s insurer doesn’t pay any of your bills. You have to completely rely on your own policy.

So, which parts of your North Carolina auto insurance coverage can help you with those expenses? Medical payments coverage will help pay your medical bills. Collision will help pay your repair bills. But both of those coverages are optional. You’ll be on your own if you didn’t add them to your policy.

North Carolina car insurance companies

Car insurance for high-risk drivers

Have a lot of traffic tickets or accidents? You might have a hard time finding car insurance coverage. In North Carolina, you can still turn to the state’s reinsurance facility. It’s the car insurer of last resort for the state’s high-risk drivers.

Consumer complaints

If you want to see how often a particular insurer’s customers file complaints with regulators, you can check out regulators’ listing of car insurance complaints by company online.

Also, you can file a complaint if you want regulators to follow up on a problem you have with your North Carolina car insurance company.

Know before you buy

If you’re buying from a small insurance company or agent you’ve never heard of before, you may want to make sure it’s licensed to do business in your state. If you buy a policy from an unlicensed agent or company, your coverage may be worthless.North Carolina regulators monitor who is and isn’t licensed in the state, and they provide an online tool that you can use to look up license information for companies and agents.

Did You Know?

Unique pricing system

North Carolina uses a car insurance pricing system that’s not found in any other state in the country. In North Carolina, all insurers have to write a single proposal asking for price changes, which regulators must approve to take effect.