The Auto Insurance Act sweep change is coming to North Carolina. And the impact may be felt at a higher price. As of July 1, 2025, the new law will significantly increase minimum liability insurance requirements, expand coverage for uninsured and uninsured drivers, and introduce consumer protection measures known as policy stacking. Many of the changes are designed to enhance financial protection for accident victims, but they can also increase the cost of coverage.
This summer, North Carolina’s Auto Insurance Act
North Carolina Legislature has passed Senate Bill 452 On October 3, 2024, it affected several aspects of North Carolina auto insurance. Most changes take effect on July 1, 2025 and will focus on how much hauling the insurance company must do and how insurers assess driver risk profiles and pricing policies. Here’s what NC drivers need to know:
Higher minimum liability insurance requirements
All new policies and policy updates occurring after July 1st will have a higher mandatory minimum liability coverage limit. North Carolina is one of four states that have increased Minimum coverage limits for 2025 To better reflect the costs of healthcare and property repair in today’s economy. In particular, the new $50,000 minimum limit on property damage is the highest in the country.
New Minimum Limit
| Coverage Type | Minimum limit required |
|---|---|
| Physical Disability Responsibility (BI) | $50,000 per person / $100,000 per accident |
| Liability for property damages (PD) | $50,000 per accident |
| Uninsured driver responsibility (um) | $50,000 per person / $100,000 per accident |
| Uninsured driver responsibility (UIM) | $100,000 per accident |
Old minimum limit
| Coverage Type | Minimum limit required |
|---|---|
| Physical Disability Responsibility (BI) | $30,000 per person / $60,000 per accident |
| Liability for property damages (PD) | $25,000 per accident |
| Uninsured driver responsibility (um) | $30,000 per person / $60,000 per accident |
| Uninsured driver responsibility (UIM) | $50,000 per accident |
Why is it important?
Minimum liability limitations refer to the minimum amount of car insurance coverage you must legally carry, and they vary from state to state. If the driver causes an accident and the damage exceeds the minimum limit, this will cause a difference.
Bodies’ injuries claims have become more frequent, with payments increasing over the past few years. Due to average physical injury claims $27,600 per injured personthe new minimum limit of $50,000 means that drivers are less likely to run out of car policy and bear out-of-pocket costs. At the same time, the minimum limit policy could be a little more upfront.
According to an analysis of May 2025 data from Quadrant Information Services, North Carolina drivers carrying a full compensation policy with a 30/60/25 liability limitation pay an average of $1,816 per year. Increased coverage to 50/100/50 will average a fee of $1,860. This is an increase of $44 a year. However, other rating factors may increase the costs associated with the new limits.
Commissioners for Mike Cause shared his thoughts on how these new laws will affect drivers in North Carolina. Many of them may already have tight budgets.
Inexperienced operator extra fees have been extended for new drivers
Insurance companies take into account the pricing policy in North Carolina and the age and experience of drivers who tend to pay more for car insurance. By law, newly licensed drivers in North Carolina will pay an additional inexperienced operator fee for the first three years of license. As of July 1st, additional charges range from three to eight years.
Why is it important?
Teen drivers will already pay some of the highest car insurance fees, but this change may mean that families with new drivers will pay longer. Currently, one 16-year-old driver, North Carolina parents pay an average of $4,542 per year for fully covered auto insurance and $1,643 per year for minimum coverage. New Law State discounts for new drivers may be available, but details of the discount are unknown, according to the North Carolina Department of Insurance (NCDOI).
Uninsured and underinsured drivers (UM/UIM)
It requires a higher UM/UIM limit of 50/100/50, as well as uninsured driver coverage, and follows stack and compeer rules. Drivers can add or “stack” UIM coverage from the insurance contract of a failed driver.
Why is it important?
Before the law was changed, payments for UIM claims were based on differences in injury policy restrictions on disabled drivers’ licenses and victim damage balances. The coverage of the driver with a failure is deducted from the UIM payments. As of July 1st, coverage of disabled drivers has been added to the limits of victim policy, allowing injured parties to access more coverage. This adjustment could potentially increase the cost of UM/UIM coverage across the board.
Changes in prayer for judgment continue the rules
North Carolina has a unique traffic law system that allows drivers to suspend guilty convictions with prayer prayers for judgment (PJC). This will allow drivers to avoid additional charges as long as they maintain a clean driving record for three years. Due to changes in the law, the PJC experience period will be between three and five years.
Why is it important?
If a driver with a PJC is found guilty of a second travel violation within five years, insurance will be added for both violations. The extended time frame is intended to provide isolation incident generosity while reducing the repeated use of PJC options.
Increased additional fees for major travel violations and abandonable speeding
As of July 1, if there is a pre-moving violation within the last five years, no driver (even those with PJCs) will be added if they receive a speeding ticket with a speed limit of 10 mph or less. Additionally, more than four violations occur SAFE Driver Incentive Plan (SDIP) Insurance Points You will be charged an additional fee for five years, not three.
Why is it important?
Usually, only the most serious driving violations have 4 or more SDIP points, including reckless driving, highway racing, negligent murder, and more. According to the NCDOI, these violations generally increase car insurance interest rates by 90-340%. Additional 2-year extra charges can have a major impact on your insurance budget High-risk driver.
NC suggests board-wide rate hikes in addition to the new law
The NCRB proposed an increase in the average rate across the state 22.6% Effective on October 1st. According to Commissioner Cashy, these rate changes, along with other changes that occurred on July 1, will result in Concedrn.
“This rate rise will affect a considerable number of people who are already having difficult times,” says Causey. “More people can move uninsured, but this is already a problem.”
The last rate increase requested by the NCRB was 28.4% in February 2023. However, the chairman’s cause spread over two years, lowering the increase to 9%. A hearing has been set up on September 22nd regarding the latest fee increase request.
“I always say no to a proposed price increase if a certain portion of the state is excessively or unfairly discriminatory,” says Causey. “There’s a good chance that a settlement will be reached before the court date, but you’ll never know.”
The national average cost of auto insurance is $2,692 per year for full coverage as of May 2025. Drivers in North Carolina pay less than $1,955 a year on average. “We have been able to maintain a stable, healthy insurance market,” says Causey.
The Department of Insurance will not write state laws. They are written by the North Carolina Legislature. Casey knows his division might blame these increases, but the reality is that “commissioners must follow state law.” However, this does not mean there are no steps citizens can take to oppose these changes.
People need to understand that they can complain to the DOI with concerns about insurance. They can call us, send us emails, and more – we help people every day. If there is something they dislike about the new law, they should contact the state senator. They don’t think it’s useful for anything, but I can tell you it is.
– Like Mike Cause
North Carolina Insurance Commissioner
