NC Auto/Motorcycle/Scooter/Non-Owners Insurance Info

Auto/Motorcycle/Scooter/Non-Owners/Recreational Vehicle Insurance in NC

We understand insurance is very confusing but that is why you have an Insurance Agent!  NC Licensed insurance agents are individuals who have taken pre-licensing insurance classes and required to pass the class test.  Agents are then required to pass a state licensing exam.  In addition, NC licensed insurance agents have to take 12 hours per year in continuing classes to maintain their license.  We are the professionals who are here to educate you and are able to suggest insurance coverage based on your specific situation and needs and guide you through the process.

We hope to explain the basic automobile insurance coverages, discuss factors that influence your rates.  We encourage you to take the time to read your personal automobile policy.  This will allow you to become familiar with the specific language of your policy.

** North Carolina Motor Vehicle Law requires that Automobile Liability coverage be continuously maintained **

The minimum coverage requirements are $30,000 Bodily Injury for each person, $60,000 total Bodily Injury for all persons in an accident and $25,000 for Property Damage.  

** NC Motor Vehicle Law also requires Uninsured/ Underinsured Motorists coverage **   Auto insurance policies with the minimum Bodily Injury and Property Damage limits are required to include Uninsured Motorists coverage. 

Automobile insurance is used to protect you against expenses you may not otherwise be able to afford if you are involved in an automobile accident. The automobile policy is a combination of four individual types of coverages.  Review your policy or contact your agent to identify the limitations and exclusions for the following coverages:
LIABILITY COVERAGE (Required by N.C. law).  Your Liability coverage will pay for bodily injury and property damage for which any covered individual becomes legally responsible. The Personal Automobile Policy will cover you or any family member while using any automobile or trailer, and any person using your covered automobile with permission. The policy will pay up to the limits listed in your policy.

Under this coverage you will have separate limits of liability per person injured and limits of liability per accident. This is called split limits. For example, you may have limits of 100/300/50. This would mean that your policy would pay up to a maximum of $100,000 to any one person injured by a covered driver or up to $300,000 for all injured parties combined, as a result of a single accident. Also, this coverage has a single limit of liability for all property damage resulting from any one accident. Using the above example of 100/300/50 limits, you will have a limit of $50,000 Property Damage Liability for each accident. 

Bodily Injury Liability This coverage will pay for damages to other people as a result of an accident caused by you or another covered driver. Examples of damages include medical and funeral expenses, lost wages, disability, rehabilitation, pain and suffering, law suit settlements and legal expenses.
Property Damage Liability This coverage will pay for damages to other people’s property as a result of an accident that is caused by you or another covered driver. Examples of damages include the repair or actual cash value (ACV) of another individual’s automobile or other property and legal expenses.

This coverage is for direct and accidental loss to your covered automobile, or any non-owned automobile that meets the following definition: any private passenger automobile or trailer not owned by or furnished or available for the regular use of you or any family member while in the custody of or being operated by you or any family member; any auto or trailer you do not own while being used as a temporary substitute for your covered auto because of its breakdown, repair, servicing, loss or destruction.

Collision- means physical damage to your covered vehicle caused by an impact with another vehicle or object. This coverage pays the lesser of the cost of repair or ACV of your automobile.
Other Than Collision (Comprehensive) This coverage pays the cost of repair or ACV of your automobile less any deductible. Losses caused by the following are considered comprehensive claims:  • Missiles or falling objects; • Fire; • Theft or larceny; • Explosion or earthquake; • Windstorm; • Hail, water or flood; • Malicious mischief or vandalism; • Riot or civil commotion; • Contact with a bird or animal; or • Breakage of glass.

This coverage pays for reasonable and necessary medical and funeral expenses due to an automobile accident. Individuals covered under this coverage include:
• You or any family member while occupying any automobile, or as a pedestrian when struck by a motor vehicle; or
• Any other person while occupying your covered automobile or any vehicle (private passenger automobile or trailer licensed for road use) driven by you or a family member.
• The policy will pay up to the limits listed in your policy for each individual injured.
• The Medical Payments coverage will not provide coverage for any expenses if the injuries occur while occupying a motorized vehicle with less than four wheels.

Uninsured Motorists (UM) Coverage will provide protection when an uninsured driver, who is at-fault, injures you or another covered individual. It also provides property damage coverage.
Underinsured Motorists (UIM) Coverage will provide protection when an underinsured driver, who is at- fault, causes injury to a covered individual. 

An underinsured driver is one whose limits of liability are less than your UIM limits, and not enough to cover the losses of the people the underinsured driver injures in an at-fault accident.  UIM coverage does not provide protection against property damage. The UIM coverage will pay a maximum of the difference between the other driver’s Liability limits and your UIM limits.


These coverages may be purchased in addition to your basic automobile coverages. You will be charged an additional premium for electing the following coverages. (Review your policy or contact your agent to identify any applicable limitations and exclusions.)

■ Automobile Death Indemnity, Specific Disability and Total Disability Benefits Coverage- This endorsement will provide a benefit for death, dismemberment, specific disability and total disability resulting from an automobile accident.
■ Miscellaneous Type Vehicle Endorsement- Motorcycles, golf carts, travel trailers and other similar type vehicles are afforded coverage by this endorsement. If your covered vehicle is a motorcycle, the endorsement will extend the medical payments coverage to motor vehicles with fewer than four wheels.
■ Coverage for Rented Vehicles- This endorsement provides coverage for you or a family member who rents a rental vehicle on a daily basis for less than 22 consecutive days.
■ Coverage for Damage to Your Auto- (Customizing Equipment Coverage; Coverage for Audio, Visual, and Data Electronic Equipment) Through this endorsement, the limits of liability are increased for custom furnishings and custom equipment, and for additional permanently installed electronic accessories.
■ Towing and Labor Costs Coverage- This coverage pays for towing and labor costs each time your covered automobile or any non-owned automobile is disabled or the keys are lost, broken or accidentally locked in the car.
■ Extended Transportation Expenses Coverage- (Rental Car Reimbursement) This coverage will pay, up to a specified rate and maximum total amount, transportation expenses incurred by you or loss of use expenses for a non-owned vehicle for which you become legally responsible.


Underwriting is the process by which an insurance company considers your application and evaluates your driving record and other factors to see if you meet its guidelines. Insurance companies use a variety of factors to determine the level of risk each applicant presents.  Each company will use its own underwriting guidelines to decide whether or not to insure a driver voluntarily. Some of the most common factors are: your driving record, where you live, type of automobile and use of automobile. 

* YOUR DRIVING RECORD- Your driving record will have the largest impact on your insurance premium. North Carolina insurance points are charged for at-fault accidents and convictions for moving violations that occur within the experience period (see chart on page 8). The experience period is the three years immediately preceding the date of application or the preparation of the policy renewal.
* WHERE YOU LIVE- The area you live in will also affect your rate. Insurers will consider vehicle and population density, road conditions, repair rates, hospital and medical costs, and the number of accidents and other claims in a particular area. Normally, urban areas have higher rates than rural areas.
* TYPE OF VEHICLE & USE OF VEHICLE The likelihood of theft, cost of repair and replacement, and the style of vehicle (sports car, SUV, station wagon, etc.) will influence your premium. For example, a sports car will normally have a higher premium than a family sedan
The more you use your vehicle the more you may pay in premium.  A vehicle you drive 20 miles to work everyday is considered a greater risk than a vehicle only used occasionally.

When an insurance company considers you a high-risk driver, it will be harder to obtain insurance, especially at better rates. Usually drivers are considered a high risk because of convictions for moving traffic violations or accidents, reckless or drunk driving history or being an inexperienced operator.

INEXPERIENCED OPERATORS- An inexperienced operator is a licensed driver who has less than three years driving experience. Adding an inexperienced operator will cause a significant increase in your premium. The day you obtain a drivers license in NC, you are charged 3 inexperienced operator insurance points.  Each year you drive, 1 point is removed until you have three full years of driving in the United States.

INSURANCE FOR HIGH RISK DRIVERS:  When an insurance company considers you a high-risk driver, it will be harder to obtain insurance, especially at better rates.  Usually drivers are considered a high risk because of convictions for moving traffic violations or accidents, reckless or drunk driving history or being an inexperienced operator. 
- It may be difficult for a high-risk driver to obtain Collision, Comprehensive and other coverages that are not offered through the reinsurance facility. The most common method is through a company that writes non-standard business.
- Your company may ask you to sign a “consent to rate” form. This would mean that you agree to pay rates higher than what has been filed with the North Carolina Department of Insurance in order for the company to write the coverage.

Since the financial responsibility laws require individuals to be covered for Bodily Injury Liability and Property Damage Liability up to the minimum limits, insurance companies cannot refuse to write those coverages.  If they do not want to bear the risk, insurance companies will place high-risk drivers in the reinsurance facility. The purpose of the facility is to assure the availability of motor vehicle liability insurance to all eligible risks.

The types of coverage offered are:
• Bodily Injury Liability from the minimum limits required to a maximum of $100,000 each person, $300,000 each accident;
• Property Damage Liability from the minimum limits required to a maximum of $50,000 each accident;
• Medical Payments Coverage from $1,000 to a maximum of $2,000 each person; (This coverage is not available for motorcycles.)
• Underinsured Motorist Coverage to a maximum $1,000,000 each person and each accident for Bodily Injury Liability; and
• Uninsured Motorist Coverage from the minimum limits required of Bodily Injury Liability and Property Damage Liability to a maximum of $1,000,000 each person and each accident for Bodily Injury Liability, and $50,000 for property damage (with a $100 deductible).

* Read the Dept of Insurance's - NC Consumer Guide to Automobile Insurance

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