New Auto Insurance Laws in North Carolina Take Effect July 2025

Major changes to North Carolina’s auto insurance laws took effect on July 1, 2025, and they’re set to impact almost every driver in the state. These changes include an increase in the minimum required liability limits and expanded surcharges for new and high-risk drivers.

The new minimum liability limits have been raised significantly. Bodily injury liability now requires a minimum of $50,000 per person and $100,000 per accident, up from the previous $30,000/$60,000. Property damage coverage has also increased from $25,000 to $50,000. These increases aim to provide better financial protection in accidents involving injuries and high repair costs.

In addition, uninsured and underinsured motorist (UM/UIM) coverage is now mandatory on all new or renewed policies in the state. Previously optional for some drivers, this coverage now matches the new liability minimums, ensuring better coverage in case of accidents involving uninsured drivers.

Another key change is the expansion of the «inexperienced driver surcharge.» Previously, this applied only to new drivers for the first three years. Now, it extends to eight years. Additionally, violations resulting in four or more insurance points will now trigger a five-year surcharge period, instead of three.

These updates are expected to cause a moderate increase in premiums across the board, particularly for new drivers and those with past traffic violations. Insurance advisors are encouraging policyholders to review their coverage levels, consider raising deductibles where appropriate, and compare quotes from multiple providers to find the best rates under the new system.

These changes are part of a larger trend across the U.S., where states are re-evaluating outdated liability limits in response to rising medical bills and repair costs. While North Carolina’s new laws may initially raise rates, they also provide more comprehensive coverage — which could save drivers significant money in the event of a major accident.