NC Insurance Laws 2025 | Bill Layne Insurance Agency

Quick Navigation

Critical Dates

July 1, 2025

New auto minimums apply

June 1, 2025

Home rate increase (7.5%)

June 1, 2026

Additional 7.5% increase

Quick Facts

Premium Increase: ~15-25%

NC Uninsured Rate: 7.4%

Last Update: 1999

Need Expert Help?

Navigate new requirements with our experienced agents

Call (336) 835-1993

Major 2025 Law Changes

Effective for all policies renewed on or after July 1, 2025

IMPORTANT: Implementation Timeline

These changes apply to all new and renewed auto insurance policies on or after July 1, 2025. Existing policies remain unchanged until their renewal date after July 1st.

1. Higher Minimum Liability Limits

North Carolina is implementing its first increase in minimum auto insurance requirements since 1999, adjusting for inflation and rising medical costs.

Coverage Type	Old Minimums (Before July 2025)	New Minimums (July 2025+)
Bodily Injury (per person)	$30,000	$50,000
Bodily Injury (per accident)	$60,000	$100,000
Property Damage	$25,000	$50,000

What This Means for You:

• Premium increases of 15-25% for minimum coverage policies
• Better protection against serious accident liability
• NC now has some of the highest minimums in the Southeast
• Consider higher limits - minimum coverage may still leave you exposed

2. Mandatory Uninsured/Underinsured Motorist Coverage

Major Change: Starting July 1, 2025, ALL auto policies must include UM/UIM coverage at the same limits as your liability coverage. This protection can no longer be rejected.

Before July 2025

• UM/UIM was optional
• Could reject coverage entirely
• Many drivers unprotected
• Lower coverage limits common

After July 2025

• UM/UIM mandatory on ALL policies
• Must match liability limits
• Minimum $50,000/$100,000
• Cannot be rejected

Good News: Elimination of "Liability Setoff"

You can now collect FULL UIM benefits in addition to the at-fault driver's liability payment.

Example: If you have $50,000 UIM and collect $30,000 from the at-fault driver, you can still collect the full $50,000 from your UIM (previously would be reduced to $20,000).

3. Extended Inexperienced Driver Surcharge

Applies to: Drivers who obtain their license on or after July 1, 2025

Previous Rule

• 3 years of surcharges
• Higher rates throughout
• Gradual decrease

New Rule (July 2025+)

• 8 years of surcharges
• Years 1-3: Higher surcharges
• Years 4-8: Lower, decreasing rates
• More gradual transition

4. Prayer for Judgment Continued (PJC) Changes

Insurance companies can now look back further when checking your PJC history.

3-year lookback period

New

5-year lookback period

Auto Insurance Requirements

Current NC minimum requirements as of July 2025

Mandatory Coverage (July 2025)

Liability Coverage

Bodily Injury (per person) $50,000
Bodily Injury (per accident) $100,000
Property Damage $50,000

UM/UIM Coverage

UM Bodily Injury (per person) $50,000
UM Bodily Injury (per accident) $100,000
UM Property Damage $50,000

Why Consider Higher Limits?

• Average hospital stay costs $15,000-$30,000
• New vehicles average $48,000
• Personal assets at risk if minimums exceeded
• Umbrella policies require higher base limits

Optional Coverage to Consider

Collision Coverage

Covers damage to your vehicle in an accident

Required for financed vehicles

Comprehensive

Covers theft, vandalism, weather damage

Often required by lenders

Rental Reimbursement

Pays for rental car during repairs

$30-50/day typical

Gap Insurance

Covers loan balance if car totaled

Essential for new car loans

Homeowners Insurance Updates

Rate changes and important coverage information

2025-2026 Rate Changes

Approved Rate Increases

• June 1, 2025: 7.5% base rate increase statewide
• June 1, 2026: Additional 7.5% increase approved
• Total increase: 15.56% over two years
• "Consent to rate" policies may see higher increases (up to 250%)

Legal Requirements

Note: North Carolina does NOT legally require homeowners insurance. However, mortgage lenders will require coverage to protect their investment.

Coverage Gaps to Watch

Flood Damage

NOT covered by standard policies

Separate flood insurance required

Earthquake

Usually excluded from coverage

Available as endorsement

Sewer Backup

Not covered without endorsement

Water backup coverage available

Home Business

Limited business coverage

May need separate policy

Your Rights as a Consumer

Know your protections under NC law

Claims Handling Rights

You Have the Right To:

Prompt claim acknowledgment (30 days)
Reasonable investigation
Written denial explanations
Fair settlement offers
Hire public adjuster or attorney

Prohibited Practices:

Misrepresenting coverage
Unreasonable delays
Lowball offers
Refusing valid claims
Improper cancellation

NC Unfair Claims Settlement Practices Act

NC General Statute § 58-63-15 protects you from unfair insurance practices and allows you to sue for bad faith claims handling.

Filing Complaints

How to get help when things go wrong

NC Department of Insurance

Contact Information

Phone

855-408-1212

Website

ncdoi.gov

Online

File complaint online

What to Include:

• Policy and claim numbers
• Insurance company and agent names
• Dates of all communications
• Copies of correspondence
• Photos and documentation

Need Help With the New Requirements?

Our experienced agents stay current on all NC insurance law changes and can help you find the right coverage at the best price

Call (336) 835-1993 Get Free Quote

1283 N Bridge St, Elkin, NC 28621

Save@BillLayneInsurance.com

Menu

North Carolina Insurance Laws 2025