Is North Carolina a No-Fault State?

Let’s take a look at the insurance laws in the Tar Heel State, what no-fault coverage is, and the types of coverage drivers can add to their North Carolina auto insurance policies to ensure they’re protected in any accident scenario. 

While all drivers are required to have auto insurance in North Carolina, it isn’t a no-fault state. Since no no-fault laws exist, drivers aren’t required to carry no-fault coverage. Typically, no-fault states will mandate a minimum limit of a first-party medical benefit (FPMB), like personal injury protection (PIP) or medical payments coverage (MedPay). 

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 bodily injury liability per accident (30/60/25 liability coverage), and the same 30/60/25 limit in uninsured motorist coverage (UM). Those who lease or finance their vehicles may also be required to carry collision and comprehensive coverages on their full coverage policies. 

Drivers aren’t required to have an FPMB on their policies but may still opt for such coverage. An FPMB can help protect drivers should they be injured in an accident they cause, as many FPMBs cover the policyholder’s medical expenses regardless of fault in an accident. 

In a no-fault state, drivers default to the coverage provided by their policy in an accident. In a tort state, like the Tar Heel State, the fault must be assigned to at least one driver in every accident so the victim can invoke the at-fault party’s required liability coverage to cover their medical expenses or vehicle repairs. Generally, receiving benefits takes longer in tort states because fault must be assigned before anyone receives their benefits.

It’s crucial to keep in mind that driving without insurance is illegal in the Tar Heel State. Drivers who fail to maintain adequate coverage may face fines, fees, license and registration suspension, or even jail time, depending on the severity and frequency of the offense. Those who fail to maintain adequate coverage may be required to have an SR-22, which can cause one’s premiums to increase for several years.

The average cost of a full coverage policy in North Carolina is about $1,340 annually, or about 20% less than the national average. While North Carolina is one of the country’s cheapest states for auto insurance, adding an FPMB to one’s policy can cause premiums to rise since no-fault coverage is rather costly. 

In North Carolina, no-fault laws don’t apply to auto accidents because the state hasn’t enacted a no-fault law. Instead, North Carolina is a tort state when it comes to auto accidents, meaning at least one driver must always be considered at fault in an accident scenario.

Tort laws require a driver to be deemed at fault for the victim of an accident to receive the benefits provided by the at-fault driver’s liability coverage. With a minimum coverage policy, there are two situations in which the policyholder is covered. Policyholders with the minimum limit of UM coverage may have their medical expenses and vehicle repairs covered if they’re the victim of an accident caused by an uninsured driver. In contrast, if the policyholder is at fault in an accident, their liability coverage will cover the victim’s accident expenses. 

Although a full coverage policy may not be the cheapest policy in the state, it covers a wider range of scenarios. Policyholders with a full coverage policy may be covered in any accident scenario if they have an FPMB like MedPay, collision coverage, underinsured motorist coverage (UIM), comprehensive coverage, and gap coverage. Getting a policy from one of the state’s top insurers is an excellent way for many drivers to maintain the coverage they need at the price they want.

The law doesn’t require no-fault insurance in North Carolina for a few reasons, all of which come back to population. Generally, states with a high population, high population density, or high population of uninsured drivers will enact no-fault laws to speed up the claims and legal systems. 

When a state has a high population, naturally, there will be a higher-than-average number of accidents. Similarly, if a state has a higher-than-average population of uninsured drivers, the state may experience an increase in driver-to-driver lawsuits, thus clogging the court system. With no-fault laws, both of these issues are mitigated since drivers have less ability to sue each other and are generally required to carry coverage for their own expenses. 

While North Carolina may have a high population, it doesn’t rank highly in the other categories. Thus, it doesn’t have a no-fault law and instead operates on a tort system for car accidents.

Yes, North Carolina has no-fault insurance in the form of an FPMB called medical payments coverage or MedPay. Personal injury protection, or PIP, is the most commonly known FPMB and no-fault coverage, but the coverage isn’t offered in the Tar Heel State. Instead, many drivers with full coverage policies opt for MedPay. 

MedPay is very similar to PIP, covering a range of the policyholder’s medical expenses when invoked. However, it isn’t as expansive as PIP. In some states, PIP will cover expenses like childcare and home care and may even offer a work loss stipend. MedPay doesn’t typically go that far but will cover a range of immediate medical expenses incurred from an accident, like prescription medication, surgeries, and other medical costs. 

Whether you’re in the market for a minimum coverage policy or a full coverage one, are a new driver or an experienced one, or are just curious about what’s out there, the best way to find a policy that best suits your needs is to get and compare quotes online. By getting and comparing quotes, you can ensure that you get a policy tailored to your lifestyle while getting the most bang for your buck.

Luckily, you’ve come to the right place to get quotes. Here at Clovered, we have a free quoting tool you can use to access your unique quotes in minutes. If you’d rather chat with a professional about your quote, you can reach one of our licensed agents at 833-255-4117 or agent@clovered.com.