If you drive in North Carolina, you’re legally required to carry a minimum level of auto insurance. These requirements ensure that you can cover certain expenses in case of an accident. Here's a breakdown of what’s required, along with specific considerations for leased or financed vehicles and commercial auto insurance policies.
Minimum Liability Coverage in NC
North Carolina law mandates the following minimum liability limits for auto insurance:
- $30,000 for bodily injury per person
- $60,000 for total bodily injury per accident
- $25,000 for property damage per accident
These coverages protect you if you’re at fault in an accident by paying for injuries or property damage to others. However, these limits may not be enough if you’re involved in a serious accident, so increasing your coverage is often wise.
Additional Requirements for Leased or Financed Vehicles
If you have a lienholder or lease your vehicle, you’ll need more than just liability coverage.
Comprehensive and Collision Coverage:
These cover damages to your vehicle from accidents, theft, vandalism, or natural disasters. Lenders and leasing companies require this coverage to protect their financial interest in the vehicle.
Gap Insurance:
Some lease agreements or financing contracts may also require gap insurance. This covers the difference between the vehicle’s actual cash value and the remaining balance on your loan or lease if the car is totaled.
Commercial Auto Insurance Considerations
For businesses operating vehicles, the requirements can be more complex, especially if you work with vendors or clients who require proof of insurance.
Higher Liability Limits:
Commercial auto policies often carry higher liability limits to protect your business assets.
Certificate of Insurance (COI):
Some vendors or clients may require a COI. This document proves that your policy meets their insurance requirements, such as specific liability limits or additional insured status.
Non-Owned and Hired Auto Coverage:
If employees drive their own vehicles for business purposes, you may need this coverage to protect your business from liability.
Why Minimum Coverage May Not Be Enough
While NC’s minimum limits meet legal requirements, they may fall short in real-world situations. A serious accident could leave you personally responsible for costs exceeding your coverage limits.
For example:
- A multi-car accident with significant injuries could easily surpass the $60,000 bodily injury limit.
- Property damage to a high-end vehicle could exceed $25,000.
Final Thoughts
Whether you’re an individual driver, a business owner, or leasing a vehicle, meeting the minimum insurance requirements is essential. However, ensuring you have the right coverage for your unique situation is just as important. If you have questions about your coverage or need help understanding your policy, reach out. At Agape Insurance Group, we’re here to guide you through the process and ensure you’re fully protected.