Featured Expert
Wayne Goodwin
Wayne Goodwin Former N.C. Insurance Commissioner View bio

This guide was written by

MoneyGeek Staff

North Carolina is a place for pioneers and visionaries, from the Wright Brothers at Kitty Hawk to the former Black Mountain College and artists’ colony. The state was also an early leader in the area of car insurance. Before North Carolinians take to the road, they need to know the ins and outs of auto coverage.

North Carolina Vehicle Insurance Requirements

Summary

In 1957 North Carolina became one of the first states in the country to adopt a mandatory insurance law, and its law is strictly enforced. The state also has a tightly regulated insurance market with caps on rates insurers can charge. These laws may help to keep the state’s rate of uninsured drivers at less than 10 percent, lower than most states.

The North Carolina Safe Driver Incentive Plan (SDIP) rewards drivers with a clean driving record by keeping their premiums lower. If you cause accidents or are convicted of moving violations, you will get points on your driving record, which –- based on a state formula — will directly translate into higher insurance premiums.

Who Needs Vehicle Insurance in North Carolina?

All drivers in North Carolina must carry liability insurance and uninsured/underinsured motorist coverage. You are required to have liability coverage on your vehicle the entire time it is registered and in your possession. If you are going to cancel your insurance or switch to a new company, be sure to turn in your license plate or purchase the new policy before you cancel your old insurance. Otherwise, you could be fined.

Proof of Insurance

You must provide proof of auto insurance to register your vehicle in North Carolina, and not just any insurance; a company licensed to sell insurance in North Carolina must issue your policy. Out-of-state policies are not accepted.

Minimum Insurance Requirements in N.C.

North Carolina requires that all motor vehicle drivers have the following minimum insurance coverage:

  • $30,000 injury for one person
  • $60,000 injury for two or more people
  • $25,000 property damage

In addition, the state requires that all policies include Uninsured Motorist coverage with the same minimums as liability insurance (30/60/25 in thousands). If you’re hit by a motorist without insurance, this coverage will help pay for it.

What Happens If You Drive Without Car Insurance in North Carolina?

North Carolina requires insurance companies to notify the Department of Motor Vehicles (DMV) any time an insurance policy lapses for any reason. The DMV will then send you a termination notice. You will have 10 days to respond with evidence that your insurance is in effect:

  • If you’ve changed carriers but your insurance hasn’t lapsed, you’ll need to send form FS 5-7 with your new insurance information back to the DMV within 10 days.
  • If you’ve had a break in coverage, in order to keep your license plate you’ll need to get recertified with the correct insurance information and send in the listed penalty within 10 days after you get the DMV’s letter.

You will be fined $50 the first time your coverage lapses, $100 the second time and $150 for all subsequent lapses. If you don’t pay the fine, the DMV can revoke your license plate and have the police seize it. If that happens, you may have to pay still more fines to reinstate your registration.

You can transfer your license plate to a new vehicle, but you must be sure there is no lapse in coverage when you do.

How Much Vehicle Insurance Do You Need in N.C.?

North Carolina’s liability coverage minimums are slightly higher than average, but that doesn’t mean that it will be enough to cover you in a serious accident. Most experts recommend carrying liability insurance with up to $100,000 or more per injury or death per person and $300,000 per accident. If you have a new car, for example, you probably will want (and your lender will probably require) collision and comprehensive insurance. Talk with your insurance agent to decide what combination of insurance is best for you.

What Percentage of Drivers in
North Carolina Lack Vehicle Insurance?
9.1% National Average: 12.6 %

North Carolina’s High-Risk Drivers’ Program

North Carolina adds a surcharge on all insurance policies to fund the North Carolina Reinsurance Facility – the state’s “residual” auto insurance program for high-risk drivers.

When an insurance company doesn’t think it can charge a rate that reflects the true risk for a driver at the limit set by the state, it will transfer the driver to the residual pool. North Carolina’s Reinsurance Facility now covers a whopping 23.3 percent of the state’s drivers – or 1.6 million people. This is the largest percentage of drivers insured in any state residual pool in the country.

Because surcharges are incorporated into all premiums to help fund the pool, some consumer advocates have complained that the program punishes drivers with good driving records. But former North Carolina Insurance Commissioner Wayne Goodwin argues the system works. “Drivers in North Carolina are fortunate to have among the lowest average car insurance costs in the country, and the lowest in the South,” he says. “On top of that, they have an abundance of choices of coverage from more than 150 car insurance companies. Making drastic changes to our system would only benefit insurers’ bottom lines and lead to higher rates for all North Carolina drivers.”

Car Insurance and Special Groups

Teen Drivers in North Carolina

Inform your insurer when your teenager is ready to begin driving and discuss ways to minimize the inevitable increase in your premium. For example, if you limit your child to driving your least expensive car, it may keep your rate down.

Talk to your teen about laws and any additional safety rules you expect him to follow – a precaution that research suggests may cut a teen’s risk of an accident in half. The North Carolina Department of Insurance suggests signing a contract with your teen before turning over the keys. You can find a sample contract on the DOI website.

The Impact of a Teen Driver on North Carolina Car Insurance Premiums

Median annual price change for families with a teen driver on their policy:

$1,428 increase This is a difference of 137%.
Comparison of Premium Ranges
25th - 75th Percentile Median
Watch Your Speedometer

Average annual premium increase if a teen gets a speeding ticket while driving 11-15 mph over the speed limit:

Male teen

$551

Speedometer
Female teen

$551

What Discounts Do North Carolina Teens Get?

Impact on annual premium with Good Student and Defensive Driving discounts:

$0 saved

Premiums from North Carolina Insurance Providers

Policies vary great in cost, so shop around. Check out the annual average premiums for a married couple with a 16-year-old teen driver in North Carolina:

Insurance Provider Min MEDIAN MAX
North Carolina Farm Bureau $1,344 $2,462 $4,713
State Farm $1,141 $2,406 $6,457
Nationwide $1,500 $2,743 $5,734
GMAC Insurance Group $1,646 $2,937 $5,938
GEICO $1,968 $3,245 $6,548

North Carolina Premiums: Mustang vs. Minivan

Sports cars are riskier and cost more to insure for teens than sedans and minivans, so be careful which car you choose for your child.

Average premium for two 2014
Mustang GTs

$3,699

Average premium for two 2008
Town and Country Limiteds

$2,288

Annual benefit of minivans:

$1,411 saved This is 38% less expensive.
Premium Comparison for Two Adults + 16 Year Old
25th - 75th Percentile Median

College Students in North Carolina

If your child heads off to college in another state, your coverage will continue, but your premium may change based on where she is. Even if she is not driving at school, you can’t remove her from your policy as long as her permanent residence is your home. She will be covered for liability if she borrows a car at school and when she comes home on breaks.

College vs. High School Drivers in North Carolina

Median annual premium change with a college student vs. high school driver

$1,320 decrease This is a decrease of 49%.
Comparison of Premium Ranges
25th - 75th Percentile Median

Annual Rates: How North Carolina Insurers Compare

Each year, read over your policy before it renews to see whether you could get a better rate elsewhere. Compare, for example, the average premiums for a married couple with a 19-year-old college student in North Carolina.

Provider Min MEDIAN MAX
Nationwide $598 $1,124 $2,054
GEICO $686 $1,172 $1,764
State Farm $528 $1,272 $2,748
North Carolina Farm Bureau $753 $1,436 $2,411
GMAC Insurance Group $876 $1,551 $2,604

North Carolina College Students: Distance Discount

You may see a modest savings in your family’s premium if your student lives 150+ miles away from home.

Average premium for a 19-year-old male
  • $1,343 at home
  • $1,343 at school
  • $0 in savings
Average premium for a 19-year-old female
  • $1,343 at home
  • $1,277 at school
  • $66 in savings

How Car Choice Affects Premiums in North Carolina

For your college student, driving a minivan will keep a premium lower than if he or she drives a sports car — a reflection of the lower risk to insurers.

2014 Mustang GTs (2)

$1,704

2008 Town and Country Limited minivans (2)

$1,034

Annual benefit of minivans

$670 saved This is 39% less expensive.
Premium Comparison for Two Adults + College Driver
25th - 75th Percentile Median

Military Drivers in North Carolina

Home to Fort Bragg, America’s largest Army base, North Carolina has a large active military and veteran population: nearly 115,000 active duty military personnel and 775,020 veterans. When comparing insurance rates, look into companies that cater to active military, veterans and their families, like USAA or Armed Forces Insurance (AFI). They will likely have special insurance options to cover you during military deployments, for example. Other insurance companies, like GEICO, also provide special discounts for military families.

If you are a member of the Armed Forces and are deployed outside of North Carolina, you can present the DMV with your deployment orders and renew your license early before you go. If your license expires while on active duty outside of North Carolina, you have 60 days after you are released from active duty to renew. You can also register a vehicle by mail when deployed out of state.

North Carolina Service Members:
How Vehicle Choice Affects Your Premium

Insurance research finds SUVs and pickups are more likely to roll over, but our research shows an older model SUV still affects your premium less than a recent model sports car.

Military Drivers: A Comparison of Premium Ranges by Driver Age and Vehicle
25-Year-Old Driver
50-Year-Old Driver
25th - 75th Percentile Median

Age Savings for North Carolina
Service Members

Median auto insurance
for service members:

$871
Male (25 yrs)$968
Male (50 yrs)$869
$99 savings
Female (25 yrs)$968
Female (50 yrs)$869
$99 savings

Compare Average Premiums Available to North Carolina Military Personnel

When looking for auto insurance, it pays to compare quotes. Check out the average annual rates you can get in North Carolina.

Premium Comparison for a Military Driver
25th - 75th Percentile Median

Seniors in North Carolina

If you are age 55 or older, ask your agent about a possible discount. Several insurance companies offer discounts to drivers over age 55 who take the AARP Smart Driver Course.

Once you turn 65 in North Carolina, you have to renew your license every five years (instead of every eight). You will need to take an eye exam at each renewal, just like the rest of the population.

Undocumented Workers in North Carolina

Although a bill was introduced in the North Carolina legislature in 2015 to allow undocumented immigrants to get a driver’s license, it has not passed. The state does allow immigrants who qualify for the federal Deferred Action for Childhood Arrivals (DACA) program to legally obtain a license, however. You can find the specific criteria for DACA on the web site of the North Carolina DMV.

Licenses issued under DACA in North Carolina are temporary (usually no more than two years), although they can be renewed.

Ridesharing Insurance in North Carolina: Are You Covered?

If you drive for a transportation networking company (TNC) like Uber and Lyft, you should check with the company to be sure that both you and your passengers are fully covered the entire time you are logged in to the app. Most personal insurance policies do not cover you when you are “driving for hire” or for a business.

In August 2015 North Carolina passed a law requiring drivers for TNCs to inform their insurer and their lender (if they owe money on their vehicle) of their plan to drive for a ridesharing company before providing ridesharing services. TNCs are also required to inform drivers in writing of the types and limits of insurance coverage they offer drivers. They must also tell drivers that their personal insurance may not cover them while they are using the TNC’s app.

The law establishes minimum insurance requirements, which can be covered either by the TNC or the driver.

Car Accidents: How to File a Claim in North Carolina

If you are in an accident, pull over in a safe place. If there are any injuries, call the police immediately. Be sure to get the name, address and phone number of the other driver, along with his or her insurance information (including the policy number). Call your insurance agent to report the accident as soon as possible.

If the other person is at fault, you will need to call his or her insurance company as well. The insurance adjuster who investigates the claim will determine who is at fault. An insurance company cannot charge you insurance points (which increase your premium) if you were not at fault.

North Carolina is one of only four states (plus the District of Columbia) that still practice something called “pure contributory negligence.” This means that if you are found to be even partially to blame for an accident, you cannot collect damages in a civil suit. So if you were going five miles over the speed limit when someone recklessly turned in front of you, you may have no recourse in the courts.

Best and Worst States for Driver Safety: How Does North Carolina Rank?

North Carolina Driver Safety Ranking

30th in the U.S.
About Our Data

The driver safety table shows the different safety factors that contribute to your state's overall safety rank (in the green box). The overall safety ranking and the National Ranking column scores in each category (including crash fatality rates) are from safest to most dangerous, with 1st being the safest and 51st the least safe.

How did we create the safety rankings?

We created a traffic safety ranking of all US states plus the District of Columbia by combining data from the National Highway Traffic Safety Administration and the Insurance Institute for Highway Safety. We looked at fatality rates by distance traveled as well as by population and gave more weight to behaviors that were riskier and preventable (i.e., drunk driving, not using a seat belt), as well as to accidents that involved more than one party (i.e., multi-vehicle).

Driver Safety Profile Number of Fatalities Fatality Rate

The fatality rate is the rate per one billion vehicle miles traveled, except for pedestrian and bicyclist fatality measures, which are per measured per a population of 100,000.

Ranking
(National)

Rankings are in order of safest to least safe. A state with the lowest fatality rate would be the safest, and thus ranked #1.

Drunk Driving-Related Fatalities 374 3.55 32nd
Speeding-Related Fatalities 413 3.93 34th
Passenger Vehicle Unrestrained Fatalities 355 3.37 25th
Unhelmeted Motorcycle Fatalities 17 0.16 16th
Multiple Vehicle Fatalities 558 5.30 34th
Pedestrian Fatalities 173 1.76 38th
Bicyclist Fatalities 22 0.22 37th
Total Vehicle Fatalities 1,289 12.25 34th

Sources: National Highway Traffic Safety Administration, Insurance Institute for Highway Safety

North Carolina: Protecting You from Injury on the Road

North Carolina has some strong driving safety laws, including requiring all motorcycle riders to wear helmets and all children to be in a car seat or booster seat until they are tall enough (or weigh enough) for a regular seat belt. According to Advocates for Highway and Auto Safety, an alliance of consumer advocates, public health officials and insurers, the state still needs a primary enforcement seat belt law for rear seat passengers, an ignition interlock law for all offenders and it needs to raise the minimum age for a learners permit to age 16 and a full license to age 18.

Safe Driving Laws – North Carolina

  Requirement State Law Details
Mandatory seat belts For the driver and all passengers
Child passenger safety Child seat/booster seat required until age 8 and/or 80 pounds. Rear-facing infant seat encouraged until 2 years of age.
Driving under the influence (DUI/DWI) 30-day license suspension for first DUI conviction (0.08 for adults; 0.04 for minors and commercial vehicle drivers). Multiple convictions or a DWI while driving with children may result in a minimum 30-day jail sentence and maximum 2-year jail sentence, steep fines and other penalties.
Ignition interlock after DUI Mandatory for all repeat DUI convictions or 0.15 BAC
Talking on cell or texting while driving (texting only) Texting prohibited for all drivers. Drivers under 18 may not use cell phone at all.
Protections for young drivers During intermediate stage, no more than one passenger under age 21 (except for family) and no driving 9 p.m. to 5 a.m.
Motorcycle helmet law Universal helmet law
Bicycle helmet law Required for those under age 16

Source: Governors Highway Safety Association, 2016

Car Insurance Resources for North Carolina Residents

North Carolina Department of Insurance, Consumer Services Division

This division in the Department of Insurance responds to consumers’ questions and complaints.

Department of Motor Vehicles

Has lots of helpful information about insurance and licensing requirements and rules of the road.

Department of Transportation, Traffic Safety

Provides information on highway closures, roadwork, traffic conditions, and safety campaigns.

Teen Driving Safety

The Governor’s Highway Safety Program put this brochure together to educate teens on how to stay safe behind the wheel.