North Dakota Auto Insurance Requirements

North Dakota Financial Responsibility Law

North Dakota's Motor Vehicle Liability Insurance Law (NDCC Chapter 39-16.1) requires all motor vehicle owners to maintain liability insurance. This is part of the state's financial responsibility law designed to ensure accident victims receive compensation.

Minimum Liability Coverage: 25/50/25

North Dakota requires all registered vehicles to carry minimum liability coverage:

Understanding Split Limits

The 25/50/25 format means:

• $25,000 maximum paid for any one person's injuries
• $50,000 maximum paid for all bodily injuries in one accident
• $25,000 maximum paid for property damage in one accident

Exam Tip: Memorize North Dakota's minimum limits (25/50/25). This is one of the most commonly tested topics on the state exam.

North Dakota Tort System

North Dakota follows a tort (at-fault) system for auto accidents:

How the Tort System Works

1. Fault Determination - After an accident, fault is determined
2. At-Fault Driver Pays - The negligent driver's insurance pays damages
3. Third-Party Claims - Injured parties claim against at-fault driver's policy
4. Right to Sue - Injured parties can sue for damages exceeding insurance limits

Modified Comparative Negligence

North Dakota follows modified comparative negligence (50% rule):

• You can recover damages if you're less than 50% at fault
• Your recovery is reduced by your percentage of fault
• If you're 50% or more at fault, you recover nothing

Example:

• Total damages: $100,000
• Your fault: 30%
• Recovery: $100,000 - 30% = $70,000

Important: Unlike no-fault states, North Dakota drivers can sue other drivers for pain and suffering without meeting a threshold.

Required Auto Coverages

Liability Coverage (Required)

Minimum 25/50/25 liability coverage is mandatory:

Uninsured Motorist Coverage (UM)

UM coverage is required in North Dakota unless the insured rejects it in writing:

Underinsured Motorist Coverage (UIM)

UIM coverage is also required unless rejected in writing:

Exam Tip: Both UM and UIM must be offered at limits equal to liability limits. Policyholders must sign written rejections to decline coverage.

Optional Auto Coverages

Physical Damage Coverage

Physical damage coverage is optional but often required by lenders:

Collision Coverage

• Pays for damage to your vehicle from collision
• Applies regardless of who's at fault
• Subject to deductible ($250 - $1,000 typical)
• Pays actual cash value minus deductible

Comprehensive Coverage (Other Than Collision)

Comprehensive covers:

• Theft - Stolen vehicle or parts
• Vandalism - Intentional damage by others
• Weather - Hail, flood, wind, lightning (particularly important in ND)
• Fire - Vehicle fire
• Glass - Windshield damage (may have $0 deductible option)
• Animal Collision - Hitting deer, livestock (common in rural ND)

North Dakota Note: Comprehensive coverage for hail and animal collision is particularly important given the state's severe weather and large deer/livestock population.

Medical Payments Coverage (MedPay)

Personal Injury Protection (PIP)

While North Dakota is a tort state, PIP coverage may be available:

• Covers medical expenses
• May include lost wages
• May include funeral expenses
• First-party (pays regardless of fault)

Proof of Insurance Requirements

What Drivers Must Carry

North Dakota law requires:

• Proof of insurance at all times when operating a vehicle
• Insurance ID card (paper or electronic accepted)
• Present proof upon request by law enforcement

Electronic Proof

North Dakota accepts electronic proof of insurance:

• Smartphone display of insurance card
• Insurance company app
• PDF on mobile device

Failure to Provide Proof

SR-22 Requirements

What is an SR-22?

An SR-22 is a certificate of financial responsibility filed with the DOT:

• Not insurance - It's proof that you have insurance
• Filed by insurer - Your company files on your behalf
• Higher premiums - SR-22 policies typically cost more
• Continuous coverage - Lapse triggers immediate notification

When SR-22 is Required

North Dakota requires SR-22 after:

• Driving without insurance conviction
• DUI/DWI conviction
• Multiple traffic violations
• At-fault accident while uninsured
• License suspension for insurance-related reasons

SR-22 Duration

• Typically 3 years from date of violation
• Must maintain continuous coverage
• Lapse results in immediate license suspension
• Early termination if moving out of state (may need in new state)

Auto Insurance Cancellation

Insurer Cancellation Requirements

Valid Cancellation Reasons (After 60 Days)

• Nonpayment of premium
• Fraud or material misrepresentation
• License suspended or revoked
• Substantial change in risk
• Violation of policy terms

Nonrenewal

• 30 days notice required before expiration
• Must provide reason for nonrenewal
• Policyholder may request reconsideration

Rating Factors

Permitted Rating Factors

North Dakota allows rating based on:

Prohibited Rating Factors

• Race or national origin
• Religion
• Marital status (in some circumstances)
• Occupation (with exceptions)

Exam Tip: Know the minimum liability limits (25/50/25), that UM/UIM is required unless rejected in writing, and that North Dakota follows a tort (at-fault) system with modified comparative negligence.