Published: July 28, 2022Updated: August 15, 2022

Guide to Car Insurance | North Carolina

The complete auto insurance guide to America’s Tar Heel State

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While North Carolina may have stricter driving laws than most states, it also happens to have some of the cheapest auto insurance rates in the country. In fact, North Carolina is the fifth-cheapest state in the U.S. when it comes to annual cost of car insurance, coming in at 44 percent below the national average. If you find yourself driving through the state, make sure you have your insurance documents on your body or in your vehicle. Car insurance is required for all of the state’s 7.6 million drivers.

Car Insurance North Carolina Requires

Minimum coverage in North Carolina includes bodily injury coverage, property damage coverage, and coverage for uninsured/underinsured motorists.

Coverage Bodily injury Property damage Uninsured/underinsured motorist bodily injury Uninsured/underinsured motorist bodily injury Uninsured/underinsured motorist property damage
Minimum limit in North Carolina $20,000 per person, $40,000 per accident $15,000 per accident $60,000 per accident $30,000 per person $25,000 per accident

Even with the additional liability requirements that you won’t find in most states, North Carolina is able to crack the top five cheapest states for auto insurance.

How Much Coverage Do I Need?

  • Bodily injury: Bodily injury liability covers injury-related lawsuits and the cost of injuries that you and those listed on your policy cause to someone else.
  • Medical payments: Medical payments coverage will cover you and your passengers’ medical costs if you’re injured in a crash. Unlike personal injury protection, medical payments will not cover other losses, such as lost wages or childcare costs.
  • Property damage: Property damage liability covers losses when you or someone who has permission to drive your car causes damage to someone else’s car or property.
  • Collision: Collision coverage protects you from losses due to collisions with other cars, objects, potholes, or animals. Collision coverage will also protect you in the event that you flip your car on the road.

 

DID YOU KNOW?

According to a 2021 Consumer Reports study, you have a 1-in-77 chance of hitting a deer while driving in North Carolina. This places North Carolina among the top 15 highest-risk states for deer collisions in the U.S.1

  • Comprehensive: With comprehensive coverage, your insurer will reimburse losses due to theft and damages that aren’t due to collisions. This includes natural disasters, vandalism, and riots.
  • Underinsured/uninsured motorist: Finally, underinsured/uninsured motorist coverage protects you or someone driving your car if an underinsured or uninsured driver hits you on the road.
Type of coverage Recommended limit in North Carolina
Bodily injury $500,000
Property damage $500,000
Personal injury protection Equal to bodily injury
Uninsured motorist Equal to bodily injury
Comprehensive Actual market value of car
Collision Actual market value of car

If you can’t afford all the recommended limits, you should at least prepare for some of the state’s most common accident-related anomalies, which include animal collisions and natural disasters.

Cost of Car Insurance in North Carolina

According to data from the National Association of Insurance Commissioners, the annual cost of car insurance in North Carolina in 2019 was $741.70, which is 44 percent lower than the national average.2

Factors like credit score, driving history, and type of coverage will affect your insurance rates. These prices can range from $350 annually for the minimum required insurance to $880 for full coverage to $2,800 for drivers with poor credit. Get an insurance quote from a company to learn your exact rate.

Car Insurance Companies in North Carolina

  • Allstate
  • Erie
  • GEICO
  • Liberty Mutual
  • Nationwide
  • North Carolina Farm Bureau
  • Progressive
  • State Farm

How to Lower Premiums in North Carolina

  1. Take advantage of discounts. Most major insurance providers will offer discounts. Simply ask your insurance agent if you qualify for any of them.
  2. Use bundles. Bundling different types of coverage with your auto insurance provider —   life insurance, renters insurance, etc. — will often lower your overall premium.
  3. Increase your deductible. Increasing your deductible will reduce your premium. However, make sure that you can afford to pay your deductible before raising it. Understanding how your deductible works will enable you to make an informed decision.
  4. Lower your limits. Decreasing your limits is another way to lower your premium, but it entails more risk. If you get into a collision where the injuries or damages exceed your limit, you’ll be responsible for all costs beyond the limit.
  5. Improve your credit score. Auto insurers in most states, with the exception of Massachusetts, Hawaii, Michigan, and Florida, will factor your credit score into their rates. One sure way to lower your premium is to improve your credit score.

Proof of Car Insurance in North Carolina

There are some serious consequences to not showing proof of insurance in North Carolina.

Offense number Fine Type Jail time Probation Registration suspension Restoration fee
1 $50 Class 1 misdemeanor None 1-45 days 30 days $50
2 $100 Class 1 misdemeanor Possible 1-45 days, depending on court ruling 1-45 days 30 days $50
3 $150 Class 1 misdemeanor Possible 1-45 days, depending on court ruling 1-45 days 30 days $50

While you can show electronic proof of insurance at a traffic stop, you will need a paper copy when showing proof of liability at the DMV.

North Carolina Laws

Fault State

North Carolina is an at-fault state, which means that any driver who is at fault in an accident pays for both property damage and bodily injury.

North Carolina is one of the only states to enforce a pure contributory negligence rule, meaning if your negligence contributed in any way to an accident, you are barred from receiving any compensation, even if you were injured in the accident. For example, if you were at fault for only one percent of the accident, you cannot receive any compensation from the other driver’s insurance provider.3

Insurance adjusters will investigate the scene in order to determine who was at fault or negligent during an accident.

Driving Without Insurance

Underinsured/uninsured motorist coverage is a minimum requirement in North Carolina. Fortunately, only 7 percent of drivers are uninsured in the state, putting it among the 10 states with the lowest rates of uninsured drivers in the U.S.

While coverage is stackable in North Carolina, meaning you can combine your coverage limits across multiple vehicles, you can only stack your coverage across different insurance policies. In other words, you need to own multiple insurance policies in order to stack coverage. If you have more than one car with uninsured motorist coverage on separate policies, multiply your limit by your number of cars to get your new, higher limit per car.

DUI Laws

DUI is a serious offense in North Carolina. A DUI will stay on your record for 10 years, resulting in a 30-day license suspension along with other potential penalties.

Penalty Fine amount Jail time Community service Suspension of license Can a judge suspend the minimum sentence?
Level V Up to $200 24 hours to 60 days Possible 24 hours Possible 30-day suspension Yes
Level IV Up to $500 48 hours to 120 days Possible 48 hours Possible 60-day suspension Yes
Level III $1,000 72 hours to 6 months Possible 72 hours Possible 90-day suspension Yes
Level II $2,000 7 days to 1 year None None No
Level I $4,000 30 days to 2 years None None No

Ignition interlock devices are mandatory for offenders with high blood alcohol content (anything above a BAC of 0.15) and repeat offenders.

Offense number Ignition interlock device requirement for a BAC of 0.15 or above (after license reinstatement) Ignition interlock device requirement for a BAC below 0.15 (after license reinstatement)
1 1 year None
2 3 years 3 years
3 7 years 7 years

Seat Belt Laws

In North Carolina, seat belts are considered a primary law for drivers/front-seat passengers and secondary law for back-seat passengers. This means that a police officer can pull you over and issue you a citation for the sole reason that you (the driver) or a front-seat passenger was not wearing a seat belt. On the other hand, a police officer can issue a ticket when a back-seat passenger isn’t wearing a seat belt only if there is another citable traffic infraction.

Distracted Driving Laws

Texting and driving is banned for all drivers in North Carolina. If you’re over 18, however, you can use your phone to talk while driving or use GPS.

If you’re under 18, you can talk on the phone only with your parents or in emergency situations. All handheld device use is banned for commercial drivers.

Teen Driver Laws

The minimum age for a learner’s permit is 15 in North Carolina. If you’re looking to get a permit in North Carolina, you’ll need the following:

  • Proof of age/identity
  • Social Security card or proof of Social Security number
  • Proof of U.S. residency/citizenship or U.S.-issued verification of legal presence
  • $22 for your learner’s permit fee
Type of license Supervision (parent, guardian, or name on application for permit) Curfew Seat belts Age
Learner’s permit Must be in the front seat with a teen driver at all times 9 p.m. to 5 a.m. for first 6 months Required for all passengers 15-18
Provisional license Required only during curfew hours, unless driving for work or volunteering 9 p.m. to 5 a.m. Required for all passengers 16-18

Statute of Limitations for Claims

In North Carolina, you have three years from the date of an accident to file a claim for both property damage and personal injury. If you don’t file a claim within that time frame, you won’t be eligible to receive coverage for those damages/injuries.

Cancellation and Non-Renewal Notification Laws

Cancellation is when your insurance company cancels your insurance policy during its term. Non-renewal is when your insurance provider refuses to renew your coverage at the end of its coverage period.

If your insurance provider decides to cancel or not renew your policy, it has to let you know within the allotted period of time prior to your policy’s expiration date.

Cancellation vs. non-renewal notification law in North Carolina Cancellations due to fraud, misrepresentation, or driver’s license suspension or revocation Cancellations due to nonpayment Non-renewals
How long before your policy expires your insurer must notify you 60 days 15 days 60 days

Insurers may choose to cancel or not renew a policy for a number of reasons:

  • You haven’t paid your premium consistently.
  • You have committed fraud or misrepresentation on your application.
  • Your driver’s license has been revoked or suspended.
  • Your insurance provider no longer provides that specific type of insurance.
  • You have been cited with a DUI.

Self-Insurance

North Carolina has a pretty straightforward self-insurance policy. If you want to self-insure, you need to show proof of at least $205,000 in collateral.

Car Inspection Requirements

To register or renew your registration in North Carolina, you must complete a safety and emissions inspection within 90 days of renewal.

In order to pass your inspection, a licensed mechanic must conduct a safety and emissions inspection, which includes checking your vehicle’s headlights, signals, brakes, steering, windows, emissions, and tires. According to the North Carolina Consumers Council, the average cost for safety inspections is $13.60, and the average cost for an emissions check is $16.40.4

If you don’t get your vehicle inspected by the due date, the state will block your vehicle’s registration until you provide a proper inspection.

SR-22s

There are no SR-22 requirements in North Carolina. Some states require insurers to file SR-22s on behalf of drivers who have a criminal background or a history of serious traffic violations. In states with SR-22 requirements, you must have your SR-22 certificate at all times if you have a high-risk insurance policy.

Defensive Driving

If you need or want to take a defensive driving course in North Carolina, you can find one at https://www.nsc.org/safety-training/defensive-driving/courses/online.

While defensive driving courses might be a requirement if you’ve received a citation, they are also a good way to get a discount on your car insurance. In North Carolina, defensive driving courses cost just under $50 and are four hours long.

Serious Injury and Monetary Thresholds

While there aren’t any injury or monetary minimum thresholds in North Carolina, there is a limit to how much a victim can sue a driver in the event of an accident-related injury. The punitive damages can’t exceed three times the amount of the actual damages or $250,000.

Don’t forget that North Carolina functions under contributory negligence, meaning if you were even 1 percent at fault for an accident, you cannot receive any compensation. Because insurance companies have to find just 1 percent of fault in order to nullify compensation, it’s rare that courts will award victims punitive damages in North Carolina.

Accident Reporting Requirements

If you are involved in an accident in North Carolina with losses that exceed $1,000 in injury, property damage, or death, then you must report to the police immediately. If you don’t, you could receive a fine of up to $100.

Price Discrimination Based on Gender and Credit Score

With the exception of Massachusetts, Hawaii, Michigan, and California, most states in the U.S., including North Carolina, look at your credit score and gender to determine your insurance rates. Women pay slightly less on average for car insurance than their male counterparts, and individuals with a low credit score may have to pay nearly triple the rate of individuals with an exceptional credit score.

When Is a Car Declared a Total Loss?

A vehicle is considered a total loss when the cost of repairs exceeds its actual market value (AMV). While some states require the cost of repairs to be equal to or greater than the AMV, the damages need to equal just 75 percent of the AMV for it to be considered a total loss.

Since the total loss threshold is significantly lower than the AMV in North Carolina, this should provide good news to anyone in a total loss incident. For example, if your car is worth $10,000, it needs to incur only $7,500 in damages for you to receive the maximum total loss coverage as stated in your insurance plan.

North Carolina Contact Information for Drivers

How to Contact the North Carolina Department of Transportation

  • Website: https://www.ncdot.gov/contact/Pages/default.aspx
  • Phone number: 919-715-7000
  • Mailing address:
    • 1501 Mail Service Center
    • Raleigh, NC 27699-1501
  • Physical address:
    • Transportation Building
    • 1 S. Wilmington St.

Do I Need Insurance to Register My Vehicle in North Carolina?

Proof of insurance is required at the time of registration in North Carolina. Gather the following items and take them to your local DMV to register your vehicle:

  • Vehicle title
  • MVR-1 Title application (https://www.ncdot.gov/dmv/downloads/Documents/MVR-1.pdf)
  • MVR-180 Odometer Disclosure (if your vehicle is less than 10 years old)  (https://www.ncdot.gov/dmv/downloads/Documents/MVR-180.pdf)
  • North Carolina driver’s license or a valid out-of-state driver’s license (If you have an out-of-state license, you will need a temporary North Carolina driver’s license. You can get that at https://www.ncdot.gov/dmv/license-id/driver-licenses/Pages/issue.aspx.
  • North Carolina vehicle insurance information

You can find more information about the registration process at https://www.ncdot.gov/dmv/help/moving/Pages/new-residents.aspx.

How to Get a Copy of Your Car Title in North Carolina

  1. Fill out this form: https://www.ncdot.gov/dmv/downloads/Documents/MVR-4.pdf.
  2. Enclose payment of $21.50 with the form.
  3. Send the form and payment to this address:
    • NC DMV
    • 3148 Mail Service Center
    • Raleigh, NC 27697

How to Contact North Carolina’s Insurance Department

  • Mailing address:
    • NC Department of Insurance
    • 1201 Mail Service Center
    • Raleigh, NC 27699-1201
  • Phone number: 855-408-6800
  • Website: https://www.ncdoi.gov/

Cost of Car Repairs in North Carolina

The average cost of car repairs in North Carolina is $402.86, which is 5 percent above the national average. This amount is made up of labor ($150) and parts ($252).

Crime and Fatalities in North Carolina

The motor vehicle theft rate is relatively low in North Carolina. For every 100,000 residents, there are only 194 vehicle thefts, which is 27 percent lower than the national average.

The cities with the highest rates of vehicle theft are not necessarily the largest.

Metropolitan statistical area Rate of motor vehicle theft per 100,000 residents in 2020
Greensboro-High Point, NC 273
Asheville, NC 272
Winston-Salem, NC 264
Charlotte, NC 251
Hickory, NC 248
Fayetteville, NC 234
Myrtle Beach-Conway-North Myrtle Beach, SC-NC 205
Virginia Beach-Norfolk-Newport News, VA-NC 195

Fatality Rate

North Carolina has one of the highest car accident fatality rates in the country. It is ranked sixth in fatality rate, with 1,373 deaths per 100 million vehicle miles traveled (48 percent above the national average).

Conclusion

Check out our auto insurance FAQs below to learn more about the Tar Heel State.

North Carolina Auto Insurance FAQs

You don’t have to add your teen driver to your insurance policy until they earn their limited provisional license.

You could be denied auto insurance in North Carolina if you have too many at-fault accidents, are too young, or are a high-risk driver (too many DUIs, too many traffic violations, etc.). Young drivers are more likely to have claims, which is why many companies don’t insure them. Also, the insurance company may not cover certain ZIP codes.

While premiums won’t necessarily go up or down if your car is new, the type of car you own will affect your rates. A Toyota Camry, for example, may cost you $1,325 per year for full coverage, while a Ford F-150 will cost only $1,068 annually on average in North Carolina.

No, you do not need rental car insurance in North Carolina. Rental car companies will provide the state’s minimum liability insurance as part of their basic contracts.

Citations

  1. How to Avoid Collisions With Deer This Fall. Consumer Reports. (2021, Oct 12).
    https://www.consumerreports.org/car-safety/how-to-avoid-collisions-with-deer-this-fall-a2981072345/

  2. 2018/2019 Auto Insurance Database Report. (2022). National Association of Insurance Commissioners.
    https://content.naic.org/sites/default/files/publication-aut-pb-auto-insurance-database.pdf

  3. After an Accident. (2022). North Carolina Department of Insurance.
    https://www.ncdoi.gov/consumers/auto-and-vehicle-insurance/after-accident

  4. Emissions Inspection Not Required for First Three Years or 70,000 Miles for New Vehicles. (2021). North Carolina Consumers Council.
    https://www.ncconsumer.org/news-articles-eg/north-carolina-no-longer-requires-annual-emissions-inspection-for-newer-vehicles.html