Starting July 1st, 2025, North Carolina auto insurance policyholders should expect increases in their minimum coverage levels and, as a result, the cost of their insurance policies.
Session Law (S.L.) 2024-29, which amended Financial Responsibility Act, changed the auto insurance limits from 30/60/25 to 50/100/50. For those unfamiliar with this particular formatting of numbers, a 30/60/25 policy (i.e., the old minimum policy limits) indicates that an insurance provider will pay an individual victim of an at-fault driver up to $30,000 in personal injury expenses (e.g., medical bills). If there are two or more victims, the insurance policy of the at-fault driver will cover a maximum of $50,000 in personal injury expenses to the victims of the incident. In any event, the insurance policy of the at-fault driver will pay out $25,000 in property damage (e.g., vehicle damage).
Under the new minimum policy limits that require North Carolina drivers to have a 50/100/50 plan, an insurance provider will pay an individual victim of an at-fault driver up to $50,000 in personal injury expenses (e.g., medical bills). If there are two or more victims, the insurance policy of the at-fault driver will only cover a maximum of $100,000 in personal injury expenses to the victims of the incident. In any event, the insurance policy of the at-fault driver will pay out $50,000 in property damage (e.g., vehicle damage).
This discussion obviously leaves open the question of what happens to victims of an at-fault driver whose insurance fails to pay for the full extent of the victim's damages. Here, drivers often rely upon under-insured motorist insurance (UIM policy), which is often purchased as a rider with a regular insurance policy. Under the latest requirements, North Carolina now requires drivers to purchase UIM coverage in all new or renewed policies, which was not a requirement under prior rules.
For drivers whose current policies do not meet these rules after July 1, 2025, their policies must satisfy the new 50/100/50 requirements when renewals occur.
The inexperienced operator surcharge, i.e., the premium surcharge previously applied to drivers with less than three years of driving experience, will now applied to insured individuals with less than eight years of driving experience. Though the surcharge will be applied for the first time to individuals with four to eight years of driving experience, those individuals will pay a lower surcharge than drivers with one to three years of driving experience, as the surcharge decreases in price as the driver accumulates more years of driving experience.
