Auto Insurance Laws and Regulations in North Carolina

North Carolina follows the compulsory insurance law. Therefore in order to register and maintain registration one is required to carry the minimum required coverage at all times. The state began registering vehicles in 1909 and made liability coverage a requirement in 1957 due to the number of uninsured automobiles at that time. It is one of the first states to enforce this law.

The following are the minimum liability requirement limits:

- $30,000 for bodily injury for one person
- $60,000 for bodily injury for two or more people
- $25,000 for property damage

Although the state’s limits are relatively high compared to other states they still may not be high enough considering the cost of medical care and the costs of automobiles these days. Motorists should consider purchasing higher limits to give them further protection. Also, these policies do not compensate the policyholder for any injuries or damages that they sustain as a result of a traffic accident. However, there are additional options that can be purchased which are available to do so.

Policies must be purchased from companies that are licensed and authorized to issue coverage within the state. If there is a lapse of coverage the insurer must notify the Division of Motor Vehicles at which point they will send the registrant a FS 5-7. The resident has 10 days to respond with correct coverage information if there has not been a break in the policy. If there has been a break they must submit new policy info and the listed penalty amount in order to retain their license plate. Failure to comply can result in loss of a license plate for 30 days.

In order to be relicensed after loss of license plate one must provide proof of an active policy (FS-1), pay a civil penalty of $50, $100, or $150 depending on the number of lapses that have occurred previously. They must also pay a $50 service fee and any license plate fees that apply.

Therefore, it is illegal to drive an automobile without maintaining a proper policy. The best way to find cheap auto insurance in North Carolina in order to be in compliance with laws is to shop around and compare quotes from different companies. Many motorists drop their coverage due to the fact that it is unaffordable. Getting quotes is free and by obtaining multiple ones to choose from will raise the chances of finding one that can fit your budget and keep you on the road legally.