Do you want to keep your driver’s license in North Carolina? Don’t ever drive without auto insurance! You can’t register or get a license plate for your car without proof of liability and uninsured motorist insurance coverage.
If you’re in the market for auto insurance in North Carolina, there are a few facts you need to know. Understanding the difference between standard and non-standard auto policies helps ensure you get the right coverage for your situation.
Keep reading for a guide to standard and non-standard auto policies in North Carolina.
Auto Insurance
When you sign up for auto insurance, you’re signing a contract. You’ll pay a fee that ensures if you’re in an accident, the insurance company pays the damages as outlined in the contract.
Never sign a contract without reading it in full! Don’t assume the insurance company pays for every type of accident and the resulting damages.
Like any contract, insurance contracts come with exclusions. For instance, most standard policies in North Carolina won’t cover your personal vehicle for an accident that happens while using the car as a public conveyance.
It’s up to you to understand what’s covered by your policy before you sign on the dotted line.
Types of Liability Insurance
There’s more than one type of liability with car accidents. The types include:
- Bodily liability
- Property damage liability
Each part of the policy pays up to the limit stated in the policy. Limits vary depending on what state you live in.
When you look at your policy, you’ll see something like this: 100/300/50. This refers to the different limits for each part of the policy.
In the 100/300/50 example, the policy pays no more than $100,000 to any one person injured in an accident. The policy won’t pay more than $300,000 for all injured parties in a single accident.
The last number is for property damage resulting in an accident. In this example, the policy maximum is $50,000 for property damages per accident.
Bodily Liability
Bodily liability covers actual bodily harm to another person injured by you in a car accident. This also includes funeral expenses, lost wages, and legal expenses. Disability and rehabilitation also fall into this category.
Property Damage Liability
Property damage liability covers damage to another driver’s vehicle or property caused by you in an accident. This also includes legal expenses.
North Carolina Liability Limits
North Carolina has minimum policy requirements. They are:
- $30,000 – bodily injury per person
- $60,000 – bodily injury total per accident
- $25,000 – property damage per accident
- $2,000 – medical
- $1,000,000 – uninsured motorist coverage
This is the least amount you can carry on your insurance in North Carolina. You can have higher limits but it will cost you more.
Standard Auto Policies
A standard auto insurance policy in North Carolina meets the basic coverage requirements set by the state. You only qualify for a standard policy if you are not a high-risk driver.
Non-Standard Auto Policies
Insurance companies use risk assessment for coverage determination. Some people fall into high-risk categories based on certain factors. What factors make you a high risk and in need of a non-standard auto policy?
Young Drivers
Teenage drivers have more accidents and tickets, so they’re high risk and may need a non-standard policy.
Older Drivers
Once you hit 65, you’re also in a high-risk category. Older drivers die at a rate of 20 per day in car crashes in the U.S.
New Adult Drivers
Even if you’re not a teen when you get your license, a new driver over the age of 25 is also a high-risk driver. This often happens when an adult moves out of a big city to the suburbs and no longer has a public transportation option.
Drunk Driving
Do you have a DUI ticket (driving under the influence)? That makes you a high-risk driver. Driving while intoxicated causes almost 30% of all traffic fatalities in the United States.
Once you have a DUI or an accident related to drunk driving, getting insurance is difficult and expensive.
Moving Violations
If you have moving violations such as speeding, reckless driving, or running a stop sign or red light that also lands you in the high-risk category. Prior accidents, even if they weren’t your fault can also put you in this category.
Serious Violations
Hit-and-run accidents or road-rage incidents also make you a high-risk driver. Speeding tickets that are 20 miles over the posted speed limit are excessive speeding and that’s a serious violation.
North Carolina Reinsurance
North Carolina ensures policy coverage for high-risk drivers through the North Carolina Reinsurance Facility (NCRF). The state created the NCRF in the early 1970s.
Most insurers in NC are also members of the NCRF. This helps insurers spread the risk of insuring high-risk drivers over a wider area.
If an insurer cedes a high-risk policy to the NCRF, they forego the premiums for that policy. Each member insurance company covers the liability in proportion to the number of policies they write within the state.
The NCRF also has a clean-risk category which helps them financially by balancing high-risk and low-risk policies.
Shopping for Insurance in North Carolina
Not all insurers charge the same for the same type of policy. Always make sure you’re comparing the same type of policy when looking at rates from different companies.
An insurer notifies you if they cede your policy to the NCRF only if your premiums are higher due to the change. It’s up to the insurer which policies they cede to the NCRF. One company may cede your policy but another may not.
Non-Standard Auto Policies in North Carolina
Most drivers fall into the standard category when it comes to auto insurance. If you’re looking at non-standard auto policies, expect to pay higher premiums but that doesn’t mean you can’t find something that fits your budget.
The insurance market is complex and it’s not always easy understanding what policy is best for your needs.
Are you in the market for an auto policy in North Carolina? We understand the local insurance market and can help you get the best policy at the most affordable price. Contact us today!
