In North Carolina, the minimum requirements of liability insurance for a private passenger vehicle are 30/60/25. This set of numbers represents the minimum liability limits required for bodily injury for one person in an accident, bodily injury for all people injured in an accident, and property damage liability for one accident. In short, at a bare minimum, North Carolina drivers must carry insurance limits of $30,000 bodily injury liability for one person, $60,000 bodily injury liability for all people, and $25,000 property damage liability. Personal Injury Protection (“PIP”) and Medical Payments (“MedPay”) are not required, but are a good idea to cover the insured’s medical expenses, lost wages and other costs associated with injuries sustained during an automobile accident. PIP covers about 80% of your losses and provides a death benefit, but again, it is optional in the State of North Carolina.
Though the State requires these basic requirements, they are by no means the recommended amount of coverage needed to fully protect your assets in the event of an accident. According to Edmunds.com, a resource for car buyers and owners, it is generally recommended that you purchase $100,000/$300,000 limits on bodily injury liability. To determine the most suitable coverage limits, you will need to estimate the actual value of your own assets. In some instances, your personal assets may not require the protection of higher limits, and you can save money by opting for lower limits.
Please note that uninsured and underinsured motorist coverage is different from liability coverage. Uninsured motorist coverage pays for injuries caused by an uninsured driver as well as a hit-and-run driver in some states. This coverage is a good idea, especially in a down economy. In 2009, the Insurance Research Council reported that the economic downturn was likely to push the percentage of uninsured motorists to an all-time high. Elizabeth A. Sprinkel, senior vice president of the IRC, stated, “[a]n increase in the number of uninsured motorists is an unfortunate consequence of the economic downturn and illustrates how virtually everyone is affected by recent economic developments.” The IRC estimated 16.1% of drivers nationwide would be uninsured in 2010. Given the large percentage of uninsured drivers on the road, it is important to purchase uninsured motorist coverage to protect yourself in the event that you are hit by an uninsured motorist.
Under the Vehicle Financial Responsibility Act of 1957, all motor vehicles registered in the state must be covered by an automobile liability insurance policy that remains in effect with continuous coverage until the registration is terminated. Although you would comply with regulations by purchasing 30/60/25 liability insurance limits, you would likely leave your personal assets exposed in the event of an accident. Saving a few bucks on a cheaper policy now may end up costing you more than it’s worth.