The young North Carolina driver is looking for a big surprise this summer. So did my parents. Starting July 1, new state laws are shaking how long insurance companies can add new drivers. Nowadays, new drivers are considered to be inexperienced for eight years, rather than just three years. This means that the nerves of being a new driver will fade away, and the higher car insurance rates will likely continue for a long time after new drivers and their families spend more money over time.
North Carolina drivers have already experienced a 35% interest rate increase between January 2023 and January 2025 for full coverage auto insurance. With rising costs and uncertain economic conditions tied to car ownership, some families could re-estimate whether teens are worthy of getting behind the wheel.
What will change for the new drivers in North Carolina?
The extra charge for inexperienced operators is an additional charge that a newly licensed driver auto insurance company in North Carolina adds to the insurance policy. It is based on the idea that drivers with little experience pose higher risks on the roads. Insurance companies offset this risk by claiming more from car insurance.
Currently, North Carolina classifies “inexperienced operators” as those with less than three years of licensed driving experience. But it is about to change. According to North Carolina’s Auto Insurance Act, additional fees for inexperienced operators will jump from 3 to 8 years this July.
North Carolina General Code Chapter 58-36-65 outlines the details of the updated law, but there is still confusion as to how drivers can minimize the impact of this rate change. The law says operators who have maintained a clean driving record for three years may be eligible for discounts from inexperienced operators. However, no discount details are specified.
We contacted the North Carolina Department of Health (NCDOI) and the North Carolina Department of Rate (NCRB) for clarification. Although the NCRB did not reply, NCDOI analysts confirmed that the discount language was ambiguous. The NCRB will need to submit an inexperienced, safe driving discount to the insurance committee for approval, but as of April, this is not the case.
The analysts we spoke to also pointed out that each insurance company operates differently. Furthermore, there is no guarantee that the insurance company will be available unless you are not requesting that the insurance company provide this particular discount.
“We’ve heard concerns and complaints from families with young drivers about the 8-year extra charge,” says North Carolina Insurance Commissioner Mike Cosdy.
Who is affected and who isn’t?
Drivers licensed by July 1, 2025 will remain in the 3-year inexperienced operator pass. Drivers licensed after July 1 will be part of the new eight years of inexperienced operator route. The law focuses on driving experiences instead of age, so adults who have licensed later in life or have no qualified driving experience (i.e. adults who have taken long breaks from driving or who have no licensed in other countries may also be eligible as inexperienced operators.
What new drivers and their parents should pay particular attention to is those who are classified as licensed drivers. North Carolina uses the Graduation License Program for teens under the age of 18. There are three levels. At the first level, teens receive permission from learners. They don’t bump into inexperienced driver fees, and their parents usually don’t need to pay more for car insurance. But that changes when a teen gets a limited or full license. You will then be considered a licensed driver and face inexperienced driver fees. This means higher insurance rates.
Is North Carolina an extra fee fair for inexperienced operators?
No one wants to pay more for insurance, but this extra fee for an inexperienced operator is not a punishment for new drivers. This is a financial protection measure that reflects real-world crash data. Drivers between the ages of 20 and 29 are involved in more car accidents than any other age group, according to the North Carolina Department of Transportation. Compared to the next age category of drivers aged 30-39, drivers in their 20s are involved in 20% of car accidents.
North Carolina Auto Accident Statistics by Age
| Drivers ages 20-29 | Drivers ages 30-39 | Drivers ages 40-49 | |
|---|---|---|---|
| All cars crash | 103,399 | 86,598 | 67,629 |
| Fatal crash | 474 | 429 | 349 |
| Alcohol-related crash | 4,686 | 3,991 | 2,644 |
| Speed-related crashes | 5,202 | 2,880 | 1,590 |
| Land departure crashes | 18,083 | 13,339 | 8,746 |
| Source: 2023 North Carolina traffic accident facts |
Most insurers consider drivers under the age of 24 as “younger operators” and charge higher premiums during this period. Based on Bankrate’s analysis, when a 16-year-old driver is added to his parents’ policy, a national full coverage auto insurance premium will increase by 115%. Prices have increased by 132% in North Carolina.
Prices drop as drivers gain experience, but many fear that extending the surcharge period to eight years may mean that North Carolina drivers may have to pay a higher rate longer.
Comparing the fees for younger drivers in North Carolina to the national average, North Carolina drivers are significantly less. Nationally, the average cost of 18-year-olds’ own insurance fully covered car insurance is a shocking $7,382 as of April 2025. In North Carolina, the same policy costs $4,307.
The true cost of Bankrate’s auto insurance found that North Carolina drivers spend 2.89% of their median household income on car insurance, compared to a national average of 3.39%. Commissioner Cashy says this affordability is intentional. “(We) worked hard to maintain a stable, healthy insurance market,” he says. However, there are other effects too.
If this takes effect on July 1st, it will hurt many families. I condemn many of these, but it will be started by lawmakers. We get legislative communications from the Ministry of Insurance there every day. But in many cases, lawmakers have the idea of improving the situation and don’t always go to state agencies to get information. Then you pass a law that needs to be changed later. There are some growing pains.
– Mike Cause’s Commissioner
How families can save money with NC car insurance
Naturally, parents or new drivers hunt for more affordable car insurance. There are several ways to approach this situation. For Chad Cook, a North Carolina resident and father of a teenage driver, leaning on the rate increases is best for him. “I don’t think this changed our choice to drive him earlier,” Cook said of his son, who started driving at the age of 16.
The way I learned when I started driving and implemented it with my son was to get a license as young as possible to escape the higher fees. Extension of the inexperience period would be more convicted of that choice, so I think I’ll get an additional fee from his policy as soon as possible.
– Resident and Bankrate Engineering Manager, Chad Cook, North Carolina
For drivers and families facing high premiums, here are some of the best ways to save money with auto insurance for younger drivers.
- Tell your teen about money: If a child has a license, family insurance contracts become more expensive. Before heading to the DMV, talk to your teen about insurance costs. In addition to the price, impact accidents and speeding tickets show what happens when the premium becomes affordable.
- Ask about discounts: Most careers offer discounts to younger drivers to complete additional driver training programs or to maintain good performance. Maintaining a GPA above 3.0 may be a good incentive to gain driving privileges.
- Teens should not buy their own car: Inexperienced drivers will increase your car insurance rates. However, if new drivers are listed as drivers from time to time and share your vehicle than if they were the main operator of your vehicle, the impact will be significantly less.
- Consider liability-only compensation: If a new driver gets his or her car, consider buying a used car that doesn’t require full coverage insurance. Comprehensive, collision insurance (commonly referred to as full coverage) tends to be the most expensive part of car insurance for younger drivers. However, this does not mean that coverage should be skipped. To improve your financial protection, consult your insurance agent about increased liability restrictions.
