9 Questions About North Carolina Auto Insurance, Answered
Policies and Processes for Car Insurance in North Carolina
After a car accident, your first instinct might be to turn to your insurance company for help. But an insurance company’s priority is to maximize their profits, and they may seek any way to compensate you as little as possible to do so.
States like North Carolina have policies and laws that can complicate the insurance process even further. Before turning to your insurance company, we recommend speaking with an experienced North Carolina car accident lawyer as soon as possible to determine whether you have a valid claim.
Here’s what you need to know about auto insurance in North Carolina and how to help it work in your favor.
1. Are Drivers Required to Have Auto Insurance in North Carolina?
North Carolina state law requires drivers to have a North Carolina car insurance policy. Driving without auto insurance is a class 3 felony and can result in penalties including fines, license suspension, and even time in jail for multiple offenses.
The state requires basic liability insurance, which covers damages to other people (bodily injury liability) and their vehicles (property damage liability) as the result of an accident involving the covered automobile. An update to North Carolina’s auto insurance requirements that went into effect on July 1, 2025, now requires that drivers have uninsured or underinsured motorist coverage in addition to basic liability.
RELATED: Hit By an Uninsured Driver in North Carolina?
2. What is Contributory Negligence?
In North Carolina, contributory negligence states that an injured party cannot collect any compensation from the other driver if the injured party was also at fault for the accident. This applies even if the injured person is only 1% at fault and the other driver is 99% at fault. This harsh law hurts injury victims.
Contributory negligence can make it difficult for an injury victim to receive coverage for their injuries or property damage, which makes it even more important that they have a skilled personal injury attorney to advocate for them.
RELATED: What is Negligence?
3. What is Med Pay Insurance and Why Do I Need It?
Med Pay covers all necessary and reasonable medical expenses of anyone (driver and passengers) in the covered vehicle up to the policy limits, regardless of whether the driver played a role in the accident. While Med Pay is not required coverage under North Carolina state law, it’s still highly recommended.
In states with contributory negligence laws, such as North Carolina, Med Pay can be critical since being found 1% at-fault for an accident will leave you unable to collect any liability insurance money.
We also recommend collision insurance to help pay for damages to your vehicle, as minimum liability insurance often is not enough.
4. What Happens if I Don’t Have Auto Insurance?
Letting your car insurance lapse in North Carolina—or not having any to begin with—can result in civil penalty fines, license suspension, and even jail time for repeat offenses.
Furthermore, in the event you’re found to be at fault for a collision, not having car insurance means you could pay anywhere from a few thousand to a few hundred thousand dollars in out-of-pocket medical bills and damages to other drivers and passengers. And that would be in addition to your own bills.
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5. What is Uninsured and Underinsured Motorist Coverage?
Uninsured and underinsured coverage helps protect persons who’ve been injured in a car accident caused by a driver carrying little or no insurance.
Uninsured Motorist Coverage: North Carolina requires all policies to include bodily injury and property damage uninsured motorist coverage. This covers drivers and pedestrians in cases where the negligent driver does not have any auto insurance.
Underinsured Motorist Coverage: As of July 1, 2025, all new or renewed car insurance policies in North Carolina are required to contain coverage for underinsured motorists as well.
6. What Affects My Insurance Rates?
Car insurance companies in North Carolina base their rates on the driver’s level of risk. Some factors included in this risk calculation are:
- Age
- Credit score
- Driving history
- Location of residence
- Type of vehicle
- Average vehicle use
Factors like these can help determine how statistically likely you are to have driving incidents or accidents. For example:
- Younger, less experienced drivers may pose more liability than older drivers.
- Your location may determine what types of traffic you will be most often driving in and how frequently accidents occur in your area.
- Your driving history will show how often you take risks or drive recklessly based on how many accidents or traffic violations you have on your record.
7. What is the Safe Driver Incentive Plan?
The North Carolina Safe Driver Incentive Plan (SDIP) is a point-based system that increases the cost of your insurance based on the number of points on your driving record. Insurance rates are increased by a specific percentage depending on the extent of the violation and its corresponding point value.
For instance, a single point is given for at-fault accidents resulting in less than $2,300 in total property damage. This single point increases your car insurance rates by 40%. A reckless driving charge will incur 4 points, which increases your car insurance rates by 90%.
8. Are There Discounts for Car Insurance in North Carolina?
Always ask about auto insurance discounts when looking for a new policy. Keeping a clean record is the most efficient way to save money on your insurance, but there are often discounts available as well. That might include discounts for:
- Excellent driving
- Being a good student
- Owning multiple cars
- Owning a home
- Installing an auto-theft alarm
You may also receive discounts for insuring more than one vehicle, setting up autopay, and other factors more specific to the individual insurance company. These types of incentives are less about your driving and more about how you as a customer are a benefit to the insurance company. Your insurance agent can tell you what discounts the insurer offers.
While taking the minimum allowable amount of auto insurance might be seen as “savings,” note that it could cost you in the long run if you receive medical bills and damages in an accident that far exceed what your insurance will cover. It is worth considering higher coverage if you can afford it.
9. What Should I Do After an Accident?
After an accident, you should call the police so a police report can be created. You should also collect the following information related to the other driver:
- Basic Information: Name, address, and phone number
- License Information: Driver’s license and license plate numbers
- Insurance Information: Name of the insurance company and policy number
Additionally, regardless of whether you feel injured, always seek a medical evaluation after a car accident. Official documentation of your injuries can be very useful in insurance claims.
There are also several actions you should not take after an auto accident. They include admitting fault, driving away from the scene, and failing to properly document the accident.
One other thing you should not do: speak to an insurance adjuster before you’ve had a chance to contact a reputable and experienced North Carolina car accident lawyer.
Let us help you.
SCHEDULE YOUR CONSULTATIONContact Myers Law Firm if You’ve Been in an Accident
Winning an auto insurance claim in North Carolina can be a very complicated process. Due to contributory negligence laws, if you are found to be just 1% responsible for the accident, the insurance company is not required to provide compensation. Working with a skilled and experienced personal injury lawyer from the start can help you prove the other driver’s negligence and receive fair compensation for any injuries and damages you’ve suffered.
Contact Myers Law Firm for assistance navigating North Carolina’s contributory negligence laws and determining the strength of your potential claim. Please complete our online form or call (704) 376-3000 today to schedule your free consultation.
References
A consumer guide to automobile insurance. (2018, March). North Carolina Department of Insurance. Retrieved from http://www.ncdoi.com/_Publications/ Consumer%20Guide%20to%20Automobile%20Insurance_CAU1.pdf
North Carolina car insurance. (2013, October). Department of Motor Vehicles. Retrieved from https://www.dmv.org/nc-north-carolina/car-insurance.php
What is the penalty for driving in North Carolina without insurance? (2017, November). Car Insurance Comparison. Retrieved from https://www.carinsurancecomparison.com/what-is-the-penalty-for-driving-without-car-insurance-in-north-carolina/
The content provided here is for informational purposes only and should not be construed as legal advice on any subject.
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