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 seventh-cheapest state in the U.S. when it comes to annual cost of car insurance, coming in at 28 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.
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.
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
|Type of coverage||Recommended limit in North Carolina|
|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.
According to data from the National Association of Insurance Commissioners, the annual cost of car insurance in North Carolina in 2020 was $753, which is 28 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.
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 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.
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 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)|
|2||3 years||3 years|
|3||7 years||7 years|
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.
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.
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:
|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|
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 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:
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.
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.
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.
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.
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.
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.
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.
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.
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:
You can find more information about the registration process at https://www.ncdot.gov/dmv/help/moving/Pages/new-residents.aspx.
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).
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|
|Myrtle Beach-Conway-North Myrtle Beach, SC-NC||205|
|Virginia Beach-Norfolk-Newport News, VA-NC||195|
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).
Check out our auto insurance FAQs below to learn more about the Tar Heel State.
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.
How to Avoid Collisions With Deer This Fall. Consumer Reports. (2021, Oct 12).
2019/2020 Auto Insurance Database Report. National Association of Insurance Commissioners. (2023, Jan).
After an Accident. (2022). North Carolina Department of Insurance.
Emissions Inspection Not Required for First Three Years or 70,000 Miles for New Vehicles. (2021). North Carolina Consumers Council.