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NC Automobile Insurance Policies

As you likely know from registering your car with the Department of Motor Vehicles (DMV), North Carolina law requires that every vehicle maintain continuous liability coverage. The minimum coverage requirements are $30,000 bodily injury coverage for each person, $60,000 total bodily injury for all persons involved in an accident and $25,000 for property damage. In addition to liability insurance, North Carolina law requires uninsured motorist coverage. Those who have auto insurance policies with the minimum required bodily injury and property damage limits must have uninsured motorist coverage. Those who have policies that include limits higher than the minimum requirement must provide combined uninsured and underinsured motorist coverage.

Although you may meet the legal requirement by having liability insurance, it is a good idea to have more coverage. When selecting an auto insurance policy, you should want to be covered for the absolute worst because you never know what may happen while you are operating your vehicle. No one wakes up in the morning and plans to be involved in an automobile accident. It is important to make an informed decision on what coverage to include in your automobile insurance policy. Below I will explain the most common coverage options that drivers may include in their automobile insurance policy.

Liability coverage

Liability coverage is the provision of an automobile insurance policy that pays for bodily injury and property damage done to another vehicle. Bodily injury coverage pays for damages to other people from you causing an accident. Things that are covered by bodily injury are medical expenses, funeral cost, rehabilitation, settlements and pain and suffering. Property damage coverage pays for damage done to another person’s vehicle or property by you or another covered driver. Property damage coverage will pay for repairs, the actual cash value of another individual’s vehicle that was totaled, property expenses and legal expenses.


Collision insurance pays for physical damage that is done to your vehicle because of an accident. Collision insurance also pays for physical damage that is done to your vehicle if it collides with another object. This type of coverage will pay for either the cost of repairs for your vehicle or the actual cash value, whichever is the lesser.


Aside from collision coverage, there is an option to have comprehensive coverage. With comprehensive coverage, your vehicle will be covered from damages sustained outside of collisions with other vehicles and objects. By having comprehensive coverage, your insurance will pay for the cost of repairs to your vehicle or the actual cash value, but you must pay a deductible. For example, let’s assume that you have comprehensive insurance coverage and there is a $500 deductible.  If a dear ran out in front of your vehicle while you are driving and caused $1,500 worth of damage, you will pay the $500 deductible and your insurance will pay the remaining $1,000 for the necessary repairs to your vehicle. However, if the cost to repair the damage done to your vehicle is more than the actual cash value of the car, the insurance will pay you the actual cash value instead of repair costs. Comprehensive coverage covers losses caused by fire, theft, floods, hail, riots, glass breakage and vandalism. This list is not all inclusive, but lists the most common types of claims. When selecting a comprehensive plan, be sure to go over what is covered and what will not be covered with your insurance company.

Medical pay

Medical pay is commonly referred to as “med pay” and pays for reasonable and necessary medical and funeral expenses because of an automobile accident. Medical payments will be made for you or a family member while in a motor vehicle or as a pedestrian and any other person who is occupying your vehicle that is driven either by you or a family member. When needed, medical pay will pay up to the policy limits listed in your policy for each person who is injured and who requires medical payments.

Towing and labor

Having an automobile collision is very inconvenient. However, breaking down unexpectedly can be just as inconvenient. Insurance companies offer towing and labor benefits with automobile insurance policies. If your car is disabled or you have locked your keys in your vehicle, this coverage will protect you and you can have your car towed to the nearest repair facility if needed. If you are within the mileage guidelines of your policy, you will not have to pay out of pocket for the services that are included in your policy that are related to towing and labor.

There are many different options to choose from when selecting your automobile insurance policy. It is a best practice to be over prepared as opposed to unprepared when an unexpected event happens that involves your automobile. Many insurance policies are cost efficient, but there are certain factors that determine your insurance rates. Your driving record is the biggest factor that insurance companies use to determine your premium. In North Carolina, at fault accidents and moving violations impact you negatively and will cause your insurance premium to be higher. Other factors that will be considered are where you live, the type of vehicle you drive, how far you drive your vehicle on a regular basis and what the vehicle will be used for on a daily basis.

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