Through our professional association with the Independent Insurance Agents of North Carolina, we recently became aware of some North Carolina Auto Insurance changes that we wanted to communicate.

Effective December 1, 2013, there are some changes to the North Carolina Financial Responsibility Law.  Somewhere buried deep in a 340 page appropriations bill were some changes to the Financial Responsibility Act involving “North Carolina Auto Liability Insurance.”

The law restates the responsibility of every motor vehicle owner to whom a vehicle is registered to maintain NC auto liability insurance.  Failure to maintain auto liability insurance during the term of the vehicle registration has now been changed from a Class 1 to a Class 3 misdemeanor in North Carolina.  To be clear, a Class 3 misdemeanor is less than a Class 1 misdemeanor.  One speculation for this change is that by lowering the misdemeanor class it will help North Carolina enforce the fines and penalties.  The penalties for noncompliance are now loss of the vehicle license plate (the 30 day limitation has been removed), imprisonment of up to 20 days instead of 120 day (again more enforceable), a fine up to $200 and a penalty up to $150 (monetary fines and penalties are now specific dollar amounts and not left to the discretion of the court).

The North Carolina Rate Bureau has prepared a new North Carolina specific "Notice of Cancellation or Refusal to Renew" insurance endorsement, NC 01 90 12 13.  This NC auto insurance endorsement specifies the new statutory wording and enumerates the penalties for noncompliance. 

So what does this mean for automobile drivers in North Carolina?   Basically, it means that auto liability insurance policyholders now have an increased urgency to keep liability insurance in force. 

If you’re a current client of ours, you know we encourage setting up automatic drafts to avoid any lapse in insurance coverage.  Now there is extra incentive as North Carolina is positioning the law to make the penalties easier to enforce.

Questions?  Call your North Carolina Insurance Advisor at 866-308-4704 to discuss.