Like most states in the U.S., auto insurance requirements in North Carolina exist for vehicle drivers using public roads. Each state’s Department of Insurance sets specific state requirements, including what type of auto insurance is required and what minimum coverage limits must be met, under penalty of law.
North Carolina Auto Insurance
North Carolina auto insurance consists of four basic types of coverage, all designed to provide protection to the policyholder against expenses that might otherwise be unaffordable in the event of a loss relating to their covered automobile. They are as follows:
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- Liability Coverage
- Coverage for Damage to Your Automobile
- Medical Payments Coverage
- Uninsured and Underinsured Motorist Coverage (UM/UMI)
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Of these four types of coverage, the only categories required by North Carolina State Law are the first, liability coverage, and the last, UM/UMI.
Liability Coverage Requirements
Liability coverage provides financial protection for others with whom you are involved in an accident determined to be your fault. It pays nothing toward your own losses, but protects you in the event you become financially responsible to a third party for an accident you caused.
Liability auto insurance requirements in North Carolina are divided into two areas – bodily injury and property damage. Liability limits are extremely conservative and experts agree that your own liability coverage limits should exceed the minimum required limits several times over to be more in line with real-world costs facing someone responsible for bodily injury or property damage losses.
That being said, the minimum limits for which your liability coverage must provide are as follows. This may be expressed as 30/60/25:
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- $30K bodily injury per person
- $60K bodily injury for all persons
- $25K property damage
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These limits are all per accident. As stated above, the dollar amounts are conservative when compared to the actual costs involved with a serious vehicle accident. It must be understood that any losses above and beyond the limits of your liability coverage are your personal responsibility to pay out of your own pocket. This is the reason why the liability coverage limits of your policy should be significantly higher than the state’s minimums.
UM coverage protects you in an accident that’s someone else’s fault and they don’t have liability coverage. UIM pays toward your losses when involved in an accident caused by someone with insufficient liability protection to cover your losses. Minimum limits are the same as those for your liability coverage.