North Carolina Auto Insurance Basics


Your automobile insurance is a requirement in order to drive on the highways in your state, however it is really a protective measure for you, your family and other drivers on the road. The basic components of car insurance break down into different areas of liability protection. Each state has its own mandatory requirements and levels of coverage. These levels are usually low and are the minimum amount that is required by law in your state. You may want to increase the amount of coverage to further protect yourself and your family.

There are actually six major areas of coverage and then some extras that you may want to consider depending on your needs. The top six are: bodily injury liability, property damage liability, personal injury protection or PIP, collision, comprehensive, and uninsured /underinsured motorist coverage.

Bodily injury liability takes care of the injuries and subsequent results of others that were in the accident. It pays for medical bills, compensation for time off from work, legal representation if required, rehabilitation or nursing care, pain and suffering, and funeral expenses.

Personal injury protection covers you, passengers in your vehicle, any drivers that have been authorized to drive your vehicle, and you and your family members when you are passengers in another vehicle. It will usually cover around 80% of your medical expenses, rehabilitation costs, funeral expenses and lost wages.

Property damage coverage pays for any damage that your vehicle does to another person’s property through your own fault. It covers the repair and replacement of the property including parts and personal items that may have suffered damage due to the accident (any items that may have been left in the car that was deemed beyond repair).

If your vehicle has been financed you must carry collision insurance to protect the lenders investment. Collision insurance covers the cost of repairing or replacing your vehicle if it was involved in an accident.  Comprehensive coverage protects your car in the event that it is damaged as a result of anything other than an accident, for example if your car is stolen, someone breaks into it or there it suffers flood damage.

Another optional form of protection is uninsured motorist coverage. This pays for any damages that are a result of an uninsured motorist or a hit and run driver Under-insured motorist coverage comes into play if the other driver, who is at fault, does not have enough insurance to cover you.

Additional coverage options that you may want to investigate further are fire and theft coverage, gap insurance, pay-per-mile coverage, physical damage coverage, and rental car insurance.

It is against the law in most states to drive without proper car insurance. If you cancel your coverage, your insurance company reports this to the DMV. If you do not provide proof of new coverage you run the risk of having your license suspended for 30 days as well as having to pay fines and penalties that could cost up to $200.