Key Takeaways
- North Carolina requires minimum auto liability limits of 30/60/25 ($30,000 per person/$60,000 per accident bodily injury/$25,000 property damage)
- North Carolina is an "at-fault" state using PURE contributory negligence - the harshest fault standard
- Under contributory negligence, ANY fault by the claimant bars ALL recovery
- The NC Reinsurance Facility provides coverage for high-risk drivers who cannot obtain voluntary market coverage
- Uninsured/Underinsured Motorist coverage is mandatory in North Carolina
North Carolina Auto Insurance Requirements
North Carolina has specific auto insurance requirements that producers must understand.
Mandatory Coverage
North Carolina requires all registered vehicles to have liability insurance with minimum limits:
Minimum Liability Limits (30/60/25)
| Coverage | Minimum Limit |
|---|---|
| Bodily Injury per Person | $30,000 |
| Bodily Injury per Accident | $60,000 |
| Property Damage | $25,000 |
Memory Tip: Remember "30/60/25" for North Carolina minimum limits.
Additional Required Coverages
North Carolina requires additional coverages beyond liability:
| Coverage | Requirement |
|---|---|
| Uninsured Motorist (UM) | MANDATORY - equal to liability limits |
| Underinsured Motorist (UIM) | MANDATORY - equal to liability limits |
| Medical Payments | Optional |
Exam Tip: Unlike many states, North Carolina REQUIRES UM/UIM coverage. It cannot be rejected.
Proof of Insurance
North Carolina drivers must carry proof of insurance:
- Physical insurance card, OR
- Electronic proof on smartphone
- Penalties for driving without insurance include fines and license suspension
North Carolina's Pure Contributory Negligence
North Carolina uses pure contributory negligence, the HARSHEST fault standard:
How It Works
- Party at fault is responsible for damages
- ANY fault by the claimant bars ALL recovery
- Even 1% fault = NO recovery
- Only 4 states plus D.C. use this rule
Critical Difference from Comparative Negligence
| Fault System | Example: Claimant 10% at fault |
|---|---|
| Pure Contributory (NC) | Claimant recovers NOTHING |
| Comparative (most states) | Claimant recovers 90% |
Exam Tip: North Carolina's pure contributory negligence is VERY harsh. If a claimant is even 1% at fault, they cannot recover ANY damages. This is extremely important for the exam.
Other Contributory Negligence States
Only 4 states plus D.C. use pure contributory negligence:
- North Carolina
- Virginia
- Maryland
- Alabama
- District of Columbia
North Carolina Reinsurance Facility
The NC Reinsurance Facility provides auto insurance for high-risk drivers:
How It Works
| Feature | Details |
|---|---|
| Purpose | Coverage for high-risk drivers |
| Eligibility | Drivers unable to obtain voluntary coverage |
| Process | Insurers cede high-risk policies to Facility |
| Rates | Higher than voluntary market |
| Coverage | Full auto coverage available |
The Cession Process
- Driver applies for auto insurance with any insurer
- Insurer must issue policy (no declination allowed)
- Insurer cedes high-risk policy to Reinsurance Facility
- Facility shares risk and losses among all insurers
Key Point: North Carolina insurers CANNOT decline auto coverage. They must issue the policy and may cede high-risk drivers to the Reinsurance Facility.
Safe Driver Incentive Plan (SDIP)
North Carolina uses the Safe Driver Incentive Plan for rating:
| Points | Premium Impact |
|---|---|
| 0 points | Base rate |
| 1-3 points | Rate increase |
| 4-7 points | Higher increase |
| 8-11 points | Surcharge |
| 12+ points | Substantial surcharge |
Points are assessed for:
- At-fault accidents
- Moving violations
- DWI/DUI convictions
Medical Payments Coverage
While not mandatory, Medical Payments coverage is common:
- Covers medical expenses regardless of fault
- Available limits vary
- No deductible typically applies
- Covers named insured and family members
What are North Carolina's minimum auto liability insurance limits?
Under North Carolina's pure contributory negligence rule, what happens if a driver is 5% at fault?
Is Uninsured Motorist (UM) coverage mandatory in North Carolina?