North Carolina Auto Insurance Requirements

Every state in the U.S. has its own set of auto insurance requirements that drivers in the state must carry in order to lawfully use the roads.

The reason why auto insurance is required for drivers in the U.S. is that cars are so expensive. Most people wouldn’t be able to afford the full value of the repairs to a vehicle damaged in an accident. Insurance serves to help people repair or replace their vehicles that have been damaged in accidents.

North Carolina state law (G.S. 20-309) mandates that all vehicles with a valid North Carolina registration must have continuous liability insurance provided by a business licensed to practice in North Carolina.

Here’s more useful information about the auto insurance requirements in North Carolina:

The Minimum Auto Insurance Coverage in North Carolina

North Carolina state law (G.S. 20-279.21) requires the following minimum coverages:

North Carolina Minimum Coverage Requirement Chart

Keep in mind that the above coverages are just the mandatory minimums in the state. This does not mean if you are involved in an accident that all of the damages will be taken care of.

In fact, most people find that the minimum coverage requirements don’t even begin to cover the losses sustained in a car accident. That’s why most people choose to purchase higher coverage amounts than the bare minimum.

The Penalties for Not Carrying the Required Coverages

Insurance laws are strictly enforced in North Carolina, which makes not purchasing at least the minimum coverages particularly risky. Not to mention actually getting into an accident and needing coverage that you don’t have.

Not everyone is aware, but insurance companies must notify the North Carolina Division of Motor Vehicles (NCDMV) if liability insurance on a vehicle is canceled or coverage lapses for some reason.

NCDMV will provide a liability insurance termination notice to the vehicle’s registered owner, who then has 10 days from the date on the notice to respond. If the NCDMV does not receive a response, then the vehicle’s license plates can be revoked along with the applicable civil penalties, late fees, interest, and collections.

Here’s a list of the fines you can expect to pay for allowing your auto insurance to lapse:

Proving You Have the Required Coverages

Existing Coverage

If your auto insurance coverage hasn’t truly lapsed, you should contact your insurance company and request that they submit a certificate of insurance (Form FS-1) to NCDMV by electronically sending or faxing to (919) 733-6949.

Once the NCDMV receives the form, they will update their records and clear all of your fines.

It’s a good idea to call the NCDMV at (919) 715-7000 to verify that the insurance lapse has been cleared.

If you don’t pay the imposed penalties, your license plates may be revoked and seized by the police. Additionally, you may incur extra penalties.

Lapsed Coverage

In order to relicense your vehicle after the revocation period, you must pay a civil penalty. The amount you pay will depend on the number of prior paid lapses you’ve had within a three-year period. You must also pay a restoration fee when your vehicle is up for registration renewal.