3.1 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 No-Fault System

North Dakota is a no-fault state (N.D.C.C. chapter 26.1-41). Every owner must continuously provide security for basic no-fault benefits as well as liability coverage (26.1-41-02).

Basic No-Fault Benefits

Serious-Injury Threshold

A secured person is exempt from liability for noneconomic loss (pain and suffering) unless the injury is a serious injury (26.1-41-08). A serious injury means death, dismemberment, serious and permanent disfigurement, disability beyond 60 days, or medical expenses over $2,500.

Modified Comparative Fault

When a case goes to court, North Dakota follows modified comparative fault (50% rule) (N.D.C.C. 32-03.2-02):

• 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: North Dakota drivers can sue another driver for pain and suffering only when the injury meets the serious-injury threshold.

Required Auto Coverages

Liability Coverage (Required)

Minimum 25/50/25 liability coverage is mandatory:

Uninsured Motorist Coverage (UM)

UM coverage is required in every North Dakota auto liability policy (N.D.C.C. 26.1-40-15.2):

Underinsured Motorist Coverage (UIM)

UIM coverage is also required: the insurer must provide it at limits equal to the UM limits (N.D.C.C. 26.1-40-15.3).

Exam Tip: UM and UIM are mandatory in North Dakota, UIM limits equal the UM limits, and UM/UIM limits cannot be stacked across vehicles (N.D.C.C. 26.1-40-15.4).

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)

Basic no-fault (PIP) coverage is required in North Dakota:

• Pays economic loss, including medical expenses, up to $30,000 per person
• Work loss up to $150 per week
• Funeral, cremation and burial expenses up to $3,500
• 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

• After a no-insurance violation, proof must stay on file for one year (N.D.C.C. 39-08-20)
• Must maintain continuous coverage
• The insurer must notify the department within 10 days if the certified policy is cancelled
• Without proof on file, the department suspends driving privileges

Auto Insurance Cancellation

Insurer Cancellation Requirements

Valid Cancellation Reasons (N.D.C.C. 26.1-40-02)

• Nonpayment of premium
• Driver's license or registration suspended or revoked
• Fraud or material misrepresentation
• Vehicle used for hire, mechanically unsafe, or altered to substantially increase the risk
• The named insured moves to a state where the insurer is not licensed

Nonrenewal

• 30 days notice required before expiration (N.D.C.C. 26.1-40-05)
• The reasons are given with the notice or on written request

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 mandatory, and that North Dakota is a no-fault state with $30,000 basic no-fault benefits and a serious-injury threshold for pain-and-suffering suits.