From the moment you start driving, there’s one topic of conversation that never ends: car insurance. How to pay for it, where to get the best price, whether an accident will be covered, and what to do if rates go up.
In North Carolina, certain auto insurance coverage may be required, but the state minimums aren’t enough to help you when things go wrong. Whether you’re rear-ended at a red light, accidentally hit a fence, or have damage from a storm, car insurance is what gets you back on the road without going broke.
As long as you have the right car insurance policy.
Here’s what you need to know.
Types of Car Insurance
The most basic auto insurance you can buy for yourself is liability coverage. Beyond that, any other coverage is optional. But all of the available options are beneficial to drivers. Here’s what you need to know.
Bodily Injury Liability
Bodily injury liability pays for the medical expenses for injuries sustained by the other driver and their passengers when you’re at fault for an accident. It also covers you in the event that the other party decides to sue.
You’re only covered up to your policy limits. Any amount beyond that becomes your financial responsibility. When you choose how much coverage you want, remember just how expensive medical bills can be. Also remember that some injuries aren’t obvious at the time of an accident.
The more liability coverage you purchase, the better.
Property Damage Liability
Property damage liability pays for the property damage to the other driver’s vehicle or other property in their possession if you’re at fault for the accident. You never know what someone may have in their car during an accident – from antiques to collectibles to expensive technology. That doesn’t include the value of their vehicle or the cost to repair it.
As with other coverage, you’re only covered up to your policy limits. Although you’re not legally required to purchase a large amount of liability coverage, it’s always better to carry as much insurance as you can afford. It’s impossible to predict the cost of property damage you’ll be responsible for.
Uninsured/Underinsured Motorist Coverage
Uninsured/underinsured motorist (UIM) coverage may be the most important after your liability insurance. Why? Because if the other driver is at fault for the accident but they don’t have any or enough liability insurance, your injuries and damage will be covered.
Yes, every driver in North Carolina is supposed to have liability coverage, but we all know some people can’t or won’t purchase car insurance. Many people only buy the bare minimum to save money. The one who pays for that is you, when they hit you in an accident but their insurance only covers some of your expenses.
Medical Payments
Medical payments insurance pays for medical treatment for you (or another covered driver on your policy) and your passengers. Bodily injury liability only pays for the other driver and their passengers if you’re at fault for the accident. Medical payments cover you no matter who’s at fault.
Multiple medical expenses can be covered:
- Hospital visits
- Doctor appointments
- Ambulance and EMT fees
- Surgery
- X-rays and testing
- Dental procedures
- Health insurance deductibles and copays
- Nursing care
When choosing your policy limit, it’s important to consider what your health insurance will and won’t cover. With a medical payments policy, you won’t have to refuse an ambulance ride because of the cost.
Collision
Collision insurance covers you from the losses that can occur when you drive your car, regardless of who’s at fault. This includes multiple scenarios:
- An accident involving another vehicle, regardless of who’s at fault
- Colliding with an object like a fence, tree, guard rail, and more
- An accident involving only your vehicle, either rolling or falling over
In an accident that’s your fault, collision coverage is what helps pay for your damage.
Collision insurance is one-half of what’s often referred to as “full coverage.” When combined with comprehensive insurance (more on that below), your vehicle is well protected from most things that can happen – out on the road or when you’re parked.
Comprehensive
Comprehensive insurance is the other half of “full-coverage.” With this coverage, your vehicle is protected from damage and loss resulting from incidents other than a collision, regardless of who’s at fault. Comprehensive covers the “accidents” that are beyond your control:
- Theft and vandalism
- Damaged glass and windshields
- Fire
- Damage from weather
- Damage from animals
- Some natural disasters and other covered perils
As with all other North Carolina auto insurance policies, you’re only covered up to your policy limits.
Gap Insurance
Gap insurance doesn’t seem like it’s necessary, until you’re in a very common situation: owing more for your vehicle than it’s worth. Whether your vehicle depreciates more than you anticipate or your car note still contains old balances from previous vehicles, many people are in this situation.
Gap insurance helps pay the difference between what you owe for your vehicle and what you receive as compensation after a total loss. Your auto insurance will only pay out the current depreciated value without factoring in the balance you owe. That means you’ll be responsible for paying the difference to the bank without gap insurance.
As always, you’ll only receive an amount up to your policy limit.
Roadside Assistance
In some policies, roadside assistance is included when you purchase full coverage (collision and comprehensive insurance). In others, you pay for it separately, but it’s too valuable (and often affordable) not to buy.
Roadside assistance helps you when you break down on the side of the road. This includes:
- Jump starting your battery
- Towing your vehicle to a repair shop
- Bringing you gas if you run out on the road
- Changing a flat tire
- Helping you when you’re locked out of your car
When you’re stuck on the side of the road, in a parking lot, or even in your own driveway, you won’t worry about what you’re going to do. All you have to do is call your insurance company’s roadside assistance number.
Is Car Insurance Required in North Carolina?
North Carolina requires that all drivers carry a minimum amount of liability coverage. Uninsured/underinsured motorist (UIM) coverage is also required by motor vehicle law in the state. According to the North Carolina Department of Insurance, “Auto insurance policies with the minimum Bodily Injury and Property Damage limits are required to include Uninsured Motorists coverage. Policies with limits greater than the minimum must provide combined Uninsured/Underinsured Motorists coverage.”
The minimum amount of liability coverage you’re required to purchase includes:
- $30,000 bodily injury per person
- $60,000 bodily injury per accident
- $25,000 property damage per accident
As we’ve said before, and we’ll continue to remind you, the state-mandated minimums are not enough to help you in a serious accident. If you’re at fault for a multi-vehicle accident or one with multiple injuries, you won’t have enough coverage. Always buy as much liability coverage as you can afford, above and beyond the minimum.
While state law may determine part of your car insurance, that’s not the only insurance requirement you may have to follow. If your vehicle is leased or financed with an auto loan, you may be required to purchase full coverage (collision and comprehensive insurance) as well.
For your lease, the requirement will last as long as you lease the vehicle. With an auto loan, the requirement lasts the life of the loan. Once your vehicle is paid off, you won’t be required to carry full coverage – though it is something we highly recommend.
How Much Does Car Insurance Cost in North Carolina Per Month?
How much your car insurance costs depends on a lot of factors. However, the average cost of full coverage auto insurance in North Carolina per year is $1,392 or $116 per month. That average may be slightly more or less depending on where you live in the state.
Not everyone will pay that average amount each month. Some drivers will pay less, and others may pay more. Your car insurance premiums depend on many things:
- The insurance coverage you choose
- Your policy limits and deductibles
- The make and model of your vehicle
- The age of the driver(s) on the policy
- How many miles you drive each year
- Your driving record
- Previous claims and accidents
- Your credit history
- Your marital status
- Which auto insurance policy you choose
That last one is frequently overlooked. Shopping around for auto insurance can save you hundreds of dollars. Different insurers offer different rates, and you won’t know if you’re getting the best price if you don’t compare prices.
Common Myths About Car Insurance
A lot of misinformation is out there about buying auto insurance. Let’s bust some of the myths you’ve probably heard before.
Myth: Red cars pay more for insurance.
Truth: Insurance companies don’t consider the color of your vehicle in determining your rate. They do consider the make and model, as well as all the other factors we listed above.
Myth: If a friend drives your vehicle and is in an accident, their insurance covers them.
Truth: It depends. If the other driver is at fault for the accident, their insurance should cover the repairs and medical expenses. But if your friend is at fault, your insurance provider may ask your friend’s insurer to pay the costs. However, if your friend doesn’t have car insurance, your insurance may cover it – but that depends on the specific details of your policy.
Myth: Getting a ticket or being in an accident will automatically increase your insurance premiums.
Truth: Neither is automatically true. Again, the official answer is that it depends. In North Carolina, if the ticket adds points to your license, your rates may increase. But you can also go to traffic court and request to take a defensive driving course to have the points removed. As for the accident, it depends on the details of the claim. Damage from a storm won’t necessarily raise your rates, while being responsible for a multi-car crash with multiple injured people could.
Myth: Expensive cars cost more to insure.
Truth: What you paid for your car doesn’t determine your auto insurance premiums nearly as much as what it costs to repair your car. If your vehicle is known for requiring expensive parts or labor, your premiums may be higher than for other vehicles.
Myth: Your car insurance covers any driving you do, even business-related.
Truth: Personal auto insurance usually does not cover business activities. Whether you’re a gig driver for a ride-share company or you’re running errands for your office, both are “business use” and most standard car insurance policies won’t cover you. If you’re driving for your job, you need coverage from a commercial auto insurance policy – whether it’s your policy or your employer’s.
How Charlotte Insurance Can Help
Car insurance doesn’t have to be complicated or too expensive. Not when you have an independent insurance agent on your side, getting you quotes and answering your questions. Here at Charlotte Insurance, we’re not beholden to a single insurance company, so we can shop around from the insurers we work with to make sure you’re getting the best coverage at the best price.
We’ll work with you to find a policy that works for your life. Let us know what kind of car you’re driving, whether you’ve got young drivers in your household, and how you use your vehicle (business or personal), and we’ll give you the best options for your next auto insurance policy. Contact us today. We’re here to help!