Are North Carolina Drivers Required to Purchase Car Insurance?

North Carolina law requires all drivers to maintain minimum car insurance. If you have a driver’s license in North Carolina, you must maintain minimal amounts of auto insurance. Unfortunately, many North Carolina drivers do not have auto insurance. If you have suffered an injury resulting from a car accident in North Carolina, you may be entitled to compensation.

If another driver’s negligence caused your car accident, the other driver’s insurance should pay your claim. At Arnold & Smith, PLLC one of our skilled Charlotte personal injury attorneys can advise you as to your best legal options.

Every person with a North Carolina driver’s license must have a continuous liability insurance policy. An insurance company licensed to conduct business in North Carolina must provide the insurance policy. Out-of-state policies do not meet the North Carolina requirements.

North Carolina requires drivers to maintain liability insurance in an attempt to protect drivers, passengers, and property. Liability insurance is needed to protect North Carolina residents from bodily injury and property damage caused by negligent drivers. All drivers must maintain a minimum limit of insurance coverage.

Drivers must also maintain uninsured or underinsured motorist insurance. If a driver gets into an accident caused by another negligent driver, the driver may not have insurance. In this case, the driver who is not at fault will need to file a claim with his or her own insurance company. The driver should file the claim for uninsurance or underinsurance.

More specifically, North Carolina requires the following minimum insurance coverage:

• Bodily injury insurance of at least $30,000 for one person
• Bodily injury for two or more people of at least $60,000
• Property damage insurance of at least $25,000

North Carolina insurance companies are legally required to notify North Carolina Division of Motor Vehicles (NCDMV) when a customer cancels his or her auto insurance or the coverage lapses due to a failure to pay for the policy. Once notified, the NCDMV will send the owner of the vehicle a notice that the liability insurance was terminated. The driver will have 10 days to respond to the notice. Drivers who fail to respond may be subject to the following consequences:

• Revocation of the driver’s vehicle license plate
• Civil penalties
• Late fees
• Interest
• Collections

The NCDMV will fine those whose insurance lapses for the first time $50. The penalties increase to $150 after three or more violations. Drivers must pay $50 to relicense their vehicle once they regain the proper minimum insurance coverage. Before the NCDMV relicenses their vehicle, the driver must submit a certificate of insurance, also called a Form FS-1 to the NCDMV.

Unfortunately, it is estimated that somewhere between nine, and twenty-five percent of North Carolina drivers drive without any motor vehicle insurance. Drivers who do not have automobile insurance are violating North Carolina law. The only consequence uninsured drivers may face are the fines imposed by the NCDMV. If the uninsured driver has assets, the injured driver may be able to recover compensation successfully via a personal injury lawsuit.

If the uninsured driver does not have any assets, a civil lawsuit against him or her may be pointless. It may be possible to bring a lawsuit against a third party, such as an employer, in some cases. If the uninsured driver was working for an employer at the time of the accident, the injured party might be able to sue the employer. An employer is vicariously liable for an employee's negligent driving when the following elements occur:

• The employee was acting within the scope of employment when the accident occurred
• The driver is an employee of the employer, and
• The accident was a foreseeable consequence

If an employer or a municipality is not liable for the other driver’s negligence and the driver is uninsured and insolvent, you can file a claim with your own insurance company. Most insurance policies cover uninsurance or underinsurance. In other words, if another uninsured driver causes your accident, your own insurance company will pay out a certain amount to cover your injuries. Contact our Charlotte, North Carolina law firm today to schedule your free initial consultation.