Motor vehicle accidents have the potential to cause serious harm to vehicle occupants and property damage. If a negligent driver injures you, you may incur ongoing and immense medical bills, lost wages, and life-changing physical harm. With the cost of medical treatment, living expenses and vehicle repairs on the rise, the minimum coverage amounts no longer reflect the needs of injured drivers. On July 1st, 2025, North Carolina drivers will experience significant changes in their insurance coverage due to the new insurance minimum in NC, aimed to better address these needs.
Increased Minimum Coverage
Perhaps the most crucial change for consumers is the updated minimum insurance coverage under the new NC regulation. This includes changes to the following liability coverage:
Bodily Injury
Bodily Injury is an essential part of your liability coverage. In personal injury cases, a plaintiff may recover some or all of this amount from the at-fault driver’s insurance for expenses such as medical bills or lost wages, as well to compensate for physical harms such as pain and suffering. Previously, the minimum bodily injury insurance was $30,000 per person and $60,000 per accident. The per-person limit is the maximum amount an at-fault driver’s insurance will pay for a single person’s injuries. The per-accident limit is the maximum payout for all injuries in a single accident, no matter how many victims there are of the at-fault driver. On July 1st, 2025, the bodily injury liability minimums will change to $50,000 per person and $100,000 per accident as part of the new insurance minimum changes in NC.
Property Damage
Property damage liability is more straightforward. It covers damage to vehicles or other property. If a negligent driver hits you, you can pursue their property damage insurance for repairs or the value of your vehicle, if totaled. The previous minimum coverage was $25,000, it is increasing to $50,000 as required by new insurance minimum NC legislation.
Changes to Underinsured/Uninsured Motorist Coverage
On July 1st, 2025, Underinsured Motorist Coverage will become mandatory in North Carolina. This includes policies with minimum limits. This means that every liability policy will consist of combined Uninsured/Underinsured Motorist Coverage. UIM exists to bridge the gap if the at-fault driver’s insurance does not cover your expenses. For example, if you suffered $80,000 in damages, but the at-fault driver only purchased the minimum policy of $50,000, your UIM coverage will cover the remaining $30,000.
The Liability Credit
A crucial part of the changes to UIM coverage is eliminating the “liability credit” rule. Previously, insurers could be credited against their UIM coverage the amount recovered from any liability settlement (i.e. from the at-fault driver’s policy). Consider an example if the motor vehicle accident victim had $100,000 of UIM coverage. Assume the victim had $200,000 of damages. Also assume the at-fault driver’s policy was only $50,000. The victim’s insurer would only pay the difference between the UIM limits of the insurance purchased ($100,000) and the amount recovered form the at-fault driver ($50,000). In other words, the victim would get $50,000 from liability and $50,000 from UIM. Policyholders can now stack the UIM coverage on top of the liability – in this example, for $150,000 instead of just $100,000.
How Drivers Are Affected
While these updates aim to address the needs of people injured in motor vehicle accidents, the cost to policyholders will be noticeable. According to Insurance Commissioner Mike Causey, the poorest drivers in the state will see a significant rate increase. However, accident victims who were seriously injured or families of those who lost a loved one in a wreck have more potential to recover more fair damages thanks to the new insurance minimum NC law.
What Action Is Needed
North Carolina policyholders with the minimum amounts will find that the insurer will automatically update their policy upon renewal to reflect the new law. This means that if your policy doesn’t renew until, for example, August, no action is needed on your part until that time.
Experienced Car Accident Attorneys
New insurance minimums and additional coverage should assist those injured in serious motor vehicle accidents. If a negligent driver injured you or a loved one, contact the experienced personal injury attorneys of Maginnis Howard. We offer free consultations and take cases on contingency, meaning you don’t pay unless we win your case. Contact us online or visit our Raleigh, Charlotte, or Fayetteville offices. We represent clients across the Carolinas.
