North Carolina Raises Auto Insurance Minimums, Extends Risk Period for New Drivers
Starting July 1, 2025, North Carolina will implement new auto insurance policy limits under the SB 319 law passed in 2023, leading to potentially higher premiums for drivers. The law raises minimum bodily injury coverage from $30,000 to $50,000 per person and $60,000 to $100,000 per accident, while also doubling minimum property damage coverage from $25,000 to $50,000. This adjustment marks the first increase in over a decade, responding to financial protection needs in the evolving insurance market.
The legislation extends the period during which new drivers are considered inexperienced from three to eight years, impacting how insurers assess risk and set premiums for these drivers. Premium surcharges will decrease gradually after the third year but maintain elevated risk status longer than before. This change reflects a reassessment of driving experience linked to risk management by insurers.
Additionally, all new or renewed liability insurance policies must now include uninsured and underinsured motorist coverage, providing drivers with expanded protection against accidents involving inadequately insured parties. This requirement enhances the safety net for policyholders amid concerns about the prevalence of underfunded drivers.
The Safe Driver Incentive System in North Carolina is also adjusted to extend the premium increase period following violations. Drivers accumulating four or more points for serious offenses will face premium hikes lasting five years instead of three, increasing accountability and incentivizing safer driving practices.
State officials note these changes aim to improve financial security for drivers despite the short-term impact of rising premiums. Insurance providers and policyholders will need to adapt to new compliance standards and coverage expectations under this updated regulatory framework. These developments reflect broader trends toward tightening coverage minimums and risk-based premium adjustments in the U.S. auto insurance landscape.