SR-22 Insurance in North Carolina Explained

Whether you’re a student living in Chapel Hill, a weekday commuter to Charlotte, a mountain adventurer in Asheville, or a North Carolinian who takes advantage of all the fun things the state offers, maintaining an adequate auto insurance policy throughout one’s adventures is essential. Those who fail to maintain a sufficient car insurance policy may require SR-22 insurance on top of the legal penalties and financial consequences they may face for breaking the law.

SR-22 insurance can be tricky to understand at first, especially since each state has its own interpretation. Let’s take a look at what an SR-22 means for North Carolina auto insurance policies, how to get a policy with an SR-22, and all the other nuances of high-risk insurance in the Tar Heel State.

All drivers are required by law to have a minimum amount of auto insurance in North Carolina. Those who fail to maintain the minimum coverage requirements may face legal penalties, financial repercussions, and risk filing for an SR-22. It’s important to make the distinction early on that an SR-22 isn’t actually a certain type of insurance. Instead, an SR-22 is a form an insurer files on behalf of a high-risk driver to certify with the state that they have the minimum amount of insurance that’s legally necessary in the state.

Car insurance laws in North Carolina require drivers to have at least $30,000 in bodily injury liability per person, $60,000 in bodily injury liability per accident, $25,000 in property damage liability per accident (30/60/25 liability coverage), and the same 30/60/25 limit of uninsured motorist (UM) coverage. Those who finance or lease their vehicles may also be legally required to have a minimum limit of comprehensive and collision coverages on their policies. 

Drivers caught without sufficient coverage, whether in a routine traffic stop or in a more severe incident, will likely be required to file an SR-22 form if their license or registration is suspended. Drivers who have their documentation revoked or suspended for other reasons also risk filing for an SR-22. 

Essentially, if a driver has an SR-22 on file, then it causes the state and the driver’s insurer to keep close tabs on their driving record and insurance status. The existence of such a form on one’s record signifies to those looking that the driver is at high risk of filing a claim or making poor choices behind the wheel. 

Those with an SR-22 on file, like all other residents in the state, are only required to maintain the legal minimum amount of coverage mandated by state law. However, if a driver with an SR-22 fails to maintain an adequate policy or pay their premiums, the consequences may be more severe than those for a standard or low-risk driver.

Driving without insurance in the Tar Heel State may result in legal penalties such as fines, fees, license and registration suspension, or even jail time, as the crime is considered a misdemeanor. The penalties often range based on the severity and frequency of the crime, but even first offenders risk jail time or probation. 

An SR-22 form, otherwise known as a DL-123 form in North Carolina, requires drivers to maintain the minimum amount of coverage required by state law. While all drivers must maintain a minimum coverage policy, those with a DL-123 on file are monitored closely and may face severe penalties for letting a policy lapse or for failing to maintain adequate coverage. 

North Carolina is a bit different from other states when it comes to SR-22 insurance. The Tar Heel State utilizes the DL-123 form as its SR-22, but high-risk drivers with a poor driving record or a suspended license aren’t the only drivers required to file this form. Drivers applying for a license for the first time also require this form, as it acts as proof of insurance in the state. 

It’s important to note that an SR-22 form doesn’t actually exist in North Carolina. However, a DL-123 acts similarly to an SR-22 in other states. While drivers may be required to have an SR-22 on their record for several years in other states, the timeline for a DL-123 is typically about 30 days. However, North Carolina operates on a point system called the Safe Driver Incentive Plan (SDIP).

The SDIP causes points to be added to a high-risk driver’s file following a serious infraction, like driving without insurance or under the influence. Drivers with several points are considered high-risk, just as drivers with an SR-22 in other states are considered high-risk. Points may take about three years to drop off one’s record. In the meantime, drivers can expect higher premiums. 

Since drivers can’t get an SR-22 in North Carolina, they must obtain a DL-123 form instead. Typically, those needing a DL-123 will require it when they’re ready to reinstate their license or registration after having it revoked in a traffic violation. 

When they’re ready to reinstate their documents, drivers can request a DL-123 from their insurer. Drivers don’t have to do anything further than requesting the form from their insurer as long as they already have an active auto insurance policy that meets the state’s requirements. The DL-123 form exists for a high-risk driver’s insurer to certify with the state that the driver, indeed, has a policy that meets the state’s requirements. 

DL-123 insurance itself doesn’t cost anything, as it isn’t a specific policy or coverage, but rather a form one will request their insurer to file on their behalf. However, having a DL-123 on one’s record because of a serious driving infraction often means the driver will have several points on their record. Drivers with points on their record will see an uptick in their insurance premiums for at least a couple of years.

In North Carolina, the average premium for a full coverage policy is about $1,340 annually, or about 20% less than the national average of about $1,670 annually. However, high-risk drivers may not see premiums in the average range since being a high-risk driver likely means paying higher-than-average premiums. 

When insurers determine a driver’s rates, they assess a driver’s risk of filing a claim in all sorts of ways. Insurers often use a driver’s gender, age, ZIP code, driving record, and insurance history, among several other factors, to determine their rates. If a driver has higher-than-average premiums, they can assume their insurer considers them a high-risk driver. 

While a minimum coverage policy will always be the cheapest policy in the state, it may not be the best choice, especially for high-risk drivers like those with points on their record. Instead, a full coverage policy from one of the top insurers in the state that offers lower-than-average base rates and an array of discounts may be the best way to save on your premiums without sacrificing coverage. Generally, high-risk drivers will want to stay as protected as possible on the roads to prevent another serious incident from occurring. 

While a DL-123 doesn’t cost anything, there are high costs associated with the incident that requires a driver to file for the form. In addition to legal penalties and an increase in premiums for several years, drivers caught without sufficient coverage may face serious financial consequences in a traffic incident.

Since North Carolina isn’t a no-fault state but a tort state, many drivers rely on the at-fault party’s liability coverage in the event of an accident. While some drivers carry a first-party medical benefit like personal injury protection (PIP) or medical payments coverage (MedPay), drivers aren’t legally required to have that coverage. Should an uninsured driver cause an accident with a driver with a minimum coverage policy, the at-fault party will be on the hook for each party’s accident expenses and any legal fees should the victim decide to sue for damages. 

While there aren’t any options for short-term insurance in North Carolina that apply to high-risk drivers, those with points on their record shouldn’t expect to be considered high-risk forever. High-risk drivers who abide by traffic laws in the months following their incident should see a decrease in premiums as long as they practice safe habits on the road. 

Generally, the points on one’s record that are assigned following an incident will drop off after about three years of safe driving habits. After those points drop off, drivers should see a decrease in their premiums and will no longer be considered high-risk. 

Whether you’re searching for the cheapest SR-22 insurance in North Carolina, a policy for a high-risk driver that won’t break the bank, or are just curious about what types of policies are out there for you, the best way to see all your options in one place is to get and compare quotes online. By gathering and analyzing quotes online, you’ll be able to find the best policy for your lifestyle that suits the needs of your budget, too.

Lucky for you, we’re quoting experts here at Clovered. We even have a free quoting tool you can use to access your unique quotes in minutes. If you have questions about your quotes or want to speak to an expert, you’re still in luck. You can contact one of our licensed agents at 833-255-4117 or [email protected].