With liability coverage, your insurance company will pay the other party up to your policy limits for any damage or injuries you cause. Uninsured motorist coverage protects you in the event that you get into an accident with an uninsured driver (about 7% of all drivers in North Carolina), or a driver whose liability limits are insufficient to cover your costs.

North Carolina minimum auto insurance requirements

Type of coverage	Minimum insurance limit
Minimum liability coverage	30/60/25
Bodily injury per person	$30,000
Bodily injury per accident	$60,000
Property damage liability (PDL)	$25,000
Uninsured/underinsured motorist coverage	30/60/25
Bodily injury per person (UM/UIM)	$30,000
Bodily injury per accident (UM/UIM)	$60,000
Property damage per accident (UM only)	$25,000

Key Takeaway North Carolina drivers must carry minimum limits of both liability and uninsured motorist coverage—plus proof of insurance—while driving.

Understanding North Carolina’s minimum insurance coverage requirements

liability policy

will help protect you from lawsuits and pay for damages if you cause a car accident. Bodily injury coverage applies to medical expenses and property damage is for physical damage to property, including vehicles. This coverage does not pay for any damages to you or your own property or vehicle.

Underinsured motorist coverage pays for your own medical bills and property damages if an uninsured driver causes you to have an accident. You file this claim with your own company once you confirm that the at-fault driver did not have liability insurance—or if you suffered a hit-and-run.

North Carolina also mandates underinsured motorist coverage, which only applies to bodily injury costs. This coverage applies to cases where the at-fault driver’s bodily injury liability insurance is insufficient to cover all your medical bills.

How much does North Carolina state minimum coverage cost?

State minimum coverage in North Carolina costs an average of $2,889 per year, or $241 per month. A standard

full coverage policy

costs $3,153 per year.

Remember: Car insurance rates are highly individualized based on your age, gender, ZIP code, driving record, vehicle type, and other factors. You can lower your premiums by raising your deductibles,

qualifying for discounts

, and

comparing quotes

Do you need more coverage than North Carolina’s required insurance minimum?

Yes—although you’ll be in compliance with North Carolina car insurance laws if you only purchase minimum coverage, you’ll still be underinsured without higher liability limits.

While North Carolina’s minimum coverage requirements are higher than some states, you may not have enough protection in the event of a serious accident. Let’s use an example to see how the minimum policy limits would compare to the costs of an auto accident.

Here’s what it might look like if you’re in an accident with minimal coverage…

Let’s start with liability. According to the Insurance Information Institute (III), the average bodily injury liability claim in 2021 was about $20,000 and the average property damage claim was about $5,000.

In other words, you have about a 50/50 chance of getting into an accident that leaves you with higher liability costs. A single major accident could quickly exceed your coverage limits, leaving you with steep out-of-pocket costs. And because North Carolina is an at-fault state, you’ll still be legally responsible for covering what your insurance didn’t.

And what about your own expenses? Liability does not cover your own injuries or damage to your vehicle.

Let’s say you’re in an accident with another driver.

If the other driver was uninsured, your uninsured motorist coverage would kick in. If the other driver’s insurance was bare minimum, just like yours, your payout is limited to the state policy limits.

Now, imagine your vehicle gets vandalized or you collide with a tree. Your liability coverage offers zero protection for motor vehicles, and you’ll have to pay out-of-pocket for injuries and property damage.

While the minimum coverage levels in North Carolina cover the average claims amounts for both property damage and bodily injury, NC drivers may not have enough coverage for serious accidents or non-accident events like theft.

Key Takeaway North Carolina has better minimum insurance limits than some other states, but you still risk thousands of dollars in out-of-pocket costs by opting for minimum coverage.

Additional coverage options

A full coverage car insurance policy with liability, comprehensive, and collision coverage opens up a world of add-ons that you can include in your North Carolina auto insurance plan. Some of the best additional coverage options include:

Comprehensive insurance

: Extreme weather events, theft, and vandalism are all covered by this non-collision coverage.

Collision insurance

: If you collide with another car or object, you’ll be covered—even if you caused the incident.

Medical payments (MedPay):

MedPay reimburses medical expenses for you and your passengers, along with death benefits for serious accidents.

Gap insurance:

If you recently bought a vehicle, gap coverage is a cheap way to protect against serious financial losses while you still owe more than the car is worth—but

buy it from your insurance company

, not your dealership.

New car replacement insurance

: If your new vehicle gets totaled and you have this coverage, you can get your car replaced with one of similar make and model. No worrying about depreciation with your payout!

Towing and labor insurance

: Get reimbursed for the cost of fuel delivery, jumpstarts, tire changes, towing, and more.

Rental car reimbursement insurance

: Get the cost of a rental car covered (up to your policy’s limits) during a multi-day repair after a covered incident.

What is the penalty for not having auto insurance coverage in North Carolina?

Drivers could face financial penalties, license revocation, and even jail time if caught without valid

proof of insurance

in the state of North Carolina. It’s a Class 1 misdemeanor, so the consequences are serious—and the fines get higher with each following offense, not to mention a possible increase in insurance costs after a

coverage lapse

Penalties for driving without insurance in North Carolina

First offense

Up to 45 days of probation

30-day driver’s license suspension

30-day registration and license plate suspension

$100 fee ($50 civil penalty, $50 restoration fee)

Second offense

Up to 45 days of probation or jail time

30-day license suspension

30-day registration suspension

$150 fee ($100 civil penalty, $50 reinstatement)

Third offense

Up to 45 days of probation or jail time

30-day license suspension

30-day registration suspension

$200 fee ($150 civil penalty, $50 reinstatement)

You’ll be sent the form FS 5/7 by the DMV, which gives you one more chance to prove that you had insurance fitting the minimum requirements at the time of the incident. If you respond in 10 days with proof that you had coverage, you might be able to avoid consequences.

FAQs

Can someone drive my car if they are not on my insurance in NC?

Yes. While North Carolina insurance follows the car not the driver, there’s a principle called

permissive use

that allows you to permit other drivers to use your vehicle. Unless the driver is specifically excluded from your policy, your liability insurance should extend to anyone with permission to drive your car.

If this person is a family member living in your household, they should be added as a named driver to your policy.

How long can you drive without insurance after buying a car in North Carolina?

It’s illegal to drive without insurance in North Carolina, but many insurance companies give you up to 30 days to update your insurance if you have a prior policy with another vehicle. In this situation, your new car would be covered automatically for a period of 30 days, but then you must officially insure it—and you cannot register the vehicle without valid insurance.

Is NC a no fault state?

No, North Carolina is an at-fault state. This means that the at-fault driver is typically responsible for covering costs in the event of an accident.

How much is non owners insurance in NC?

Expect to pay about $50 per month for

non-owner car insurance

in North Carolina, depending on your driving profile. That figure is a little higher than the national average by a few dollars.

How is fault determined in a car accident in NC?

Insurance adjusters will determine fault in a car accident based on police reports (if any) and evidence submitted with your insurance claim. While the law enforcement report matters, ultimately the insurance adjuster will determine who is at fault. If your case proceeds to court, then the judge will decide fault.