Starting July 1, 2025, North Carolina implemented significant changes to its auto insurance laws that will affect every driver in the state. These updates raise the minimum coverage requirements and introduce new provisions designed to increase financial protection for drivers and accident victims alike. If you drive in North Carolina or plan to, it’s important to understand these changes to ensure you comply with the law and maintain appropriate coverage.
Higher Minimum Liability Coverage
The most notable change involves an increase in the minimum liability insurance limits that drivers must carry. These limits have not been updated since 1999, despite the rising costs of medical care and vehicle repairs over the years. The new minimum coverage levels, effective for all policies issued or renewed on or after July 1, 2025, are:
- Bodily Injury Liability: $50,000 per person and $100,000 per accident
- Property Damage Liability: $50,000 per accident
For a free legal consultation, call (877) 333-1000
Previously, the minimum bodily injury coverage was $30,000 per person and $60,000 per accident, and property damage liability was $25,000. The increased limits aim to provide better financial security in the event of an accident where someone is injured, or property is damaged.
While these changes improve protection, they may result in slightly higher premiums for drivers carrying only the minimum insurance. However, this increase is expected to be modest on average, reflecting the enhanced coverage benefits.
Mandatory Uninsured and Underinsured Motorist Coverage
Starting July 1, 2025, North Carolina requires all auto insurance policies to include Uninsured Motorist (UM) and Underinsured Motorist (UIM) coverage with limits matching the new minimum liability amounts of 50/100/50.
UM/UIM coverage protects drivers if they are involved in an accident caused by someone who either has no insurance or insufficient insurance to cover the damages. Prior to this update, UM/UIM coverage was optional or set at lower minimums, and an offset rule reduced the amount insured parties could recover.
Click to contact our personal injury lawyers today
With the elimination of the “liability setoff” and the requirement to carry UM/UIM at these higher limits, drivers will have stronger financial protection against uninsured or underinsured motorists. This is particularly important given the rising number of uninsured drivers nationwide.
Extended Inexperienced Driver Surcharge Period
Complete a Free Case Evaluation form now
North Carolina currently imposes an “inexperienced operator” surcharge on drivers new to the licensing system for three years. Starting July 1, 2025, this surcharge period will beis extended to eight years for any new driver who obtains a license after that date.
This means that young or new drivers will be considered inexperienced for a longer period, potentially resulting in higher insurance premiums during those additional years. The goal is to encourage safer driving habits over a more extended timeframe.
Changes to Prayer for Judgment Continued (PJC) Rules
North Carolina’s unique “Prayer for Judgment Continued” (PJC) system allows a driver to suspend the judgment on certain traffic offenses, such as speeding tickets, to avoid points on their driving record or insurance surcharges. Historically, the lookback period for PJCs has been three years.
Under the new regulations, this lookback period will extend to five years. This means if a driver uses a PJC and then receives a second moving violation within five years, both offenses will be considered for insurance surcharge purposes.
The extended lookback period aims to reduce repeated reliance on PJCs to avoid penalties and encourage more responsible driving behavior. Drivers should be aware that using a PJC will now have a longer impact on their insurance rates.
Longer Surcharge Duration for Major Violations
Another important update affects how long major moving violations impact insurance premiums. Starting July 1, 2025, any violation that results in four or more Safe Driver Incentive Plan (SDIP) points will cause a surcharge on insurance rates for five years, instead of the current three-year period.
Examples of major violations include reckless driving, racing on highways, and negligent homicide. These serious offenses can cause dramatic increases in insurance premiums, sometimes up to 300% or more.
This change reflects a stricter approach to penalizing risky driving and aims to improve road safety by holding drivers financially accountable for dangerous behaviors for a longer time.
What These Changes Mean for Drivers
- Review Your Insurance Policy: All drivers should check their auto insurance policies to ensure they meet the new minimum requirements. If your current coverage is below the updated limits, you will need to increase it to comply with the law.
- Consider Higher Coverage Options: While the state sets minimums, many experts recommend purchasing higher liability limits for better protection, especially given the rising costs associated with accidents.
- New Drivers Should Plan Accordingly: Young or new drivers and their families should expect potential increases in insurance premiums for a longer period due to the extended inexperienced operator surcharge.
- Be Mindful of Traffic Violations: Understanding the impact of PJCs and major moving violations on your insurance rates can help you make better decisions behind the wheel and potentially save money over time.
- Prepare for Slight Premium Increases: While coverage will improve, the increased minimums and required UM/UIM coverage may cause modest premium increases, particularly for drivers who previously carried only minimum coverage.
How DeMayo Law Can Help
Navigating changes to insurance laws can be confusing, especially when you’re also dealing with the aftermath of an accident. DeMayo Law is here to help North Carolina drivers understand their rights and options under the new insurance regulations.
If you have questions about your insurance coverage and need help after a car accident, our experienced legal team can provide guidance for your unique situation.
The new auto insurance minimums and related changes in North Carolina represent a significant shift in the state’s approach to driver protection and road safety. By raising liability limits, mandating UM/UIM coverage, and extending surcharge periods, the state aims to ensure that drivers and accident victims receive fair compensation and encourage safer driving practices.
All drivers in North Carolina should take these changes seriously by reviewing and adjusting their insurance coverage as needed. Being proactive not only keeps you compliant with the law but also better prepares you financially for unexpected incidents on the road.
If you need assistance navigating these new rules or handling any legal issues after an auto accident, contact DeMayo Law Offices today.
Call or text (877) 333-1000 or complete a Free Case Evaluation form
