North Carolina
Insurance Laws
Your plain-English guide to NC's insurance rules — including the higher state minimum liability limits (50/100/50) that have been the law since July 1, 2025.
NC's Major Auto Law Changes (Now in Effect)
In force for every NC auto policy renewed on or after July 1, 2025
Already in effect — here's where you stand
These limits have applied to every new and renewed NC auto policy since July 1, 2025. If your policy has renewed since then, you're already on the new 50/100/50 minimums — check your declarations page to confirm, and call us if you'd like to review whether the minimum is really enough for you.
1. Higher Minimum Liability Limits
North Carolina raised its minimum auto insurance requirements for the first time since 1999, adjusting for inflation and rising medical costs. The higher limits took effect July 1, 2025.
| Coverage Type | Old Minimums (Before July 2025) |
New Minimums (July 2025+) |
|---|---|---|
| Bodily Injury (per person) | $30,000 | $50,000 |
| Bodily Injury (per accident) | $60,000 | $100,000 |
| Property Damage | $25,000 | $50,000 |
What This Means for You:
- • Premium increases of 15-25% for minimum coverage policies
- • Better protection against serious accident liability
- • NC now has some of the highest minimums in the Southeast
- • Consider higher limits - minimum coverage may still leave you exposed
2. Mandatory Uninsured/Underinsured Motorist Coverage
Major Change: Since July 1, 2025, ALL auto policies must include UM/UIM coverage at the same limits as your liability coverage. This protection can no longer be rejected.
Before July 2025
- • UM/UIM was optional
- • Could reject coverage entirely
- • Many drivers unprotected
- • Lower coverage limits common
After July 2025
- • UM/UIM mandatory on ALL policies
- • Must match liability limits
- • Minimum $50,000/$100,000
- • Cannot be rejected
Good News: Elimination of "Liability Setoff"
You can now collect FULL UIM benefits in addition to the at-fault driver's liability payment.
3. Extended Inexperienced Driver Surcharge
Applies to: Drivers who obtain their license on or after July 1, 2025
Previous Rule
- • 3 years of surcharges
- • Higher rates throughout
- • Gradual decrease
New Rule (July 2025+)
- • 8 years of surcharges
- • Years 1-3: Higher surcharges
- • Years 4-8: Lower, decreasing rates
- • More gradual transition
4. Prayer for Judgment Continued (PJC) Changes
Insurance companies can now look back further when checking your PJC history.
Previous
3-year lookback period
New
5-year lookback period
Auto Insurance Requirements
Current NC minimum requirements as of July 2025
Mandatory Coverage (July 2025)
Liability Coverage
- Bodily Injury (per person) $50,000
- Bodily Injury (per accident) $100,000
- Property Damage $50,000
UM/UIM Coverage
- UM Bodily Injury (per person) $50,000
- UM Bodily Injury (per accident) $100,000
- UM Property Damage $50,000
Why Consider Higher Limits?
- • Average hospital stay costs $15,000-$30,000
- • New vehicles average $48,000
- • Personal assets at risk if minimums exceeded
- • Umbrella policies require higher base limits
Optional Coverage to Consider
Collision Coverage
Covers damage to your vehicle in an accident
Required for financed vehicles
Comprehensive
Covers theft, vandalism, weather damage
Often required by lenders
Rental Reimbursement
Pays for rental car during repairs
$30-50/day typical
Gap Insurance
Covers loan balance if car totaled
Essential for new car loans
Homeowners Insurance Updates
Rate changes and important coverage information
2025-2026 Rate Changes
Approved Rate Increases (2025 Settlement)
- • June 1, 2025: 7.5% base rate increase statewide
- • June 1, 2026: additional 7.5% increase
- • Total: about 15.5% over two years (statewide average)
- • Negotiated down from the industry's original 42.2% request (up to 99.4% in some coastal areas)
- • Insurers are locked out of another increase until June 1, 2027
- • Actual change varies by location; "consent to rate" offers can exceed the approved amount
Legal Requirements
Note: North Carolina does NOT legally require homeowners insurance. However, mortgage lenders will require coverage to protect their investment.
Coverage Gaps to Watch
Flood Damage
NOT covered by standard policies
Separate flood insurance required
Earthquake
Surry County Guide
Renters Insurance
Usually excluded from coverage
Available as endorsement
Sewer Backup
Not covered without endorsement
Water backup coverage available
Home Business
Limited business coverage
May need separate policy
Your Rights as a Consumer
Know your protections under NC law
Claims Handling Rights
You Have the Right To:
- Prompt claim acknowledgment (30 days)
- Reasonable investigation
- Written denial explanations
- Fair settlement offers
- Hire public adjuster or attorney
Prohibited Practices:
- Misrepresenting coverage
- Unreasonable delays
- Lowball offers
- Refusing valid claims
- Improper cancellation
NC Unfair Claims Settlement Practices Act
NC General Statute § 58-63-15 protects you from unfair insurance practices and allows you to sue for bad faith claims handling.
Filing Complaints
How to get help when things go wrong
NC Department of Insurance
Contact Information
Phone
855-408-1212
Website
ncdoi.gov
Online
File complaint online
What to Include:
- • Policy and claim numbers
- • Insurance company and agent names
- • Dates of all communications
- • Copies of correspondence
- • Photos and documentation
Need Help With the New Requirements?
Our experienced agents stay current on all NC insurance law changes and can help you find the right coverage at the best price
1283 N Bridge St, Elkin, NC 28621
Save@BillLayneInsurance.com