Like many states, North Carolina requires vehicle owners to show proof of sufficient liability car insurance before license plates will be issued for the vehicle. In this article, we'll take an in-depth look at these requirements, and we'll touch on other key details related to auto insurance in North Carolina.
North Carolina is a "fault" state when it comes to financial responsibility for injuries, vehicle damage, and other losses stemming from a car accident. In other words, the person who was at fault for causing the car accident is responsible for compensating anyone who suffered harm as a result of it (although from a practical standpoint it's typically the at-fault driver’s insurance carrier that will cover these losses, up to policy limits).
In North Carolina, a person who suffers losses due to a traffic accident usually can proceed in one of three ways:
Note: In no-fault car insurance states, claimants don't have this same range of options. If you're injured in a car accident in a no-fault state, you must turn to your own car insurance coverage for the payment of medical bills and other out-of-pocket losses, regardless of who caused the accident. Only if your claim reaches certain statutory thresholds can you step outside of no-fault and make a claim directly against the at-fault driver. But North Carolina drivers don't need to worry about no-fault when it comes to an in-state car accident.
If you're buying car insurance in North Carolina, the law requires you to have the following minimum amounts of liability car insurance coverage:
This basic coverage pays for medical bills, vehicle damage, and other costs of drivers, passengers, and pedestrians who incur losses stemming from a car accident you cause, up to coverage limits. You can (and in some situations should) carry more coverage to protect you in case a serious crash results in significant car accident injuries and vehicle damage. Remember, once policy limits are exhausted, you are personally on the financial hook, so higher insurance limits can help protect your personal assets in the event of a serious crash.
Your liability coverage will kick in if any family member is driving your vehicle, or if you've given someone else permission to use it. It will likely also cover you if you get into an accident in a rental car.
Finally, remember that in North Carolina (and elsewhere) liability coverage can't be applied to your own injuries or vehicle damage after a car accident. You'll need different (additional) coverage for that if you're involved in a car accident and no one else's coverage applies to your losses. For example, personal injury protection (PIP) or MedPay coverage can be used to pay your car accident medical bills, and collision coverage can pay for repairs to (or replacement of) your damaged vehicle after a car accident.
North Carolina requires that every car insurance policy sold in the state include both uninsured motorist bodily injury coverage and uninsured motorist property damage insurance. Underinsured motorist coverage may be required depending on how much coverage you carry under your policy. This coverage is crucial if you end up in a car accident with an uninsured driver, or one whose liability policy won't cover your losses.
For more information on North Carolina’s motor vehicle insurance requirements straight from the state, check out these resources from the North Carolina Department of Transportation: