If you have read my first two posts you know I am a licensed agent in North Carolina. This post will focus on the rules/laws of auto insurance in my state only. Disclaimer – always contact your insurer or agent for clarification questions or comment below and I will answer you directly.
Why auto insurance?
First off because it’s required by law to carry liability insurance in the state of NC. If that’s not reason enough, I think we could all agree the majority of people in NC could not afford to replace a vehicle if it were a total loss, and definitely would not want to be solely responsible for damages you caused in an at fault accident.
Underwriting
How is price determined for your auto policy?
- Years of driving experience
- CREDIT (Fair Isaacs Insurance Score provided by Transunion) – the higher the score the lower the cost for coverage
- Points for tickets or accidents (I will break this down in a separate section down the page)
- Are you married or single? Married gets a discount
- ZIP CODE – this is new as of last year, your rate is not dependent on zip code and losses based on that zip code
- Do you have multiple cars? Auto policies with multiple cars get a discount per car.
Safe Driver Insurance Points (SDIP)
These are the “points” a company is able to apply to your policy in the event of a ticket or accident. I have broken down every possibility for you below. Keep in mind you can use one PJC (Prayer for judgement continued) per household every 3 years. This would cause the incident to become non-chargeable as far as points but it is still a conviction so the incident could affect whether the insurer wants to continue your coverage. For example, a PJC on a DUI would waive the 12 points associated with it but by taking a PJC you are actually pleading guilty to the offense so an insurer can decide whether they want to continue coverage or not based on the conviction.
These points are applied for 3 years from the date of the conviction or accident.
1 Pointers
- Improper backing
- Improper lane change
- Failure to yield
- Driving wrong way on a one way street
- Driving too fast for conditions
- Unsafe movement
- Running stop sign or red light
- Speeding 10 miles or less than the limit when posted limit is less than 55
- Failure to yield to a blind person
- Speeding equal to or less than 55 when more than 10 miles above the posted limit
- All other one point violations
2 Pointers
- Speeding 56-75 when more than 10 miles above limit
- Driving wrong side of the road
- Following too close
- Speeding 10 miles or less over posted speed of 55 or greater
- Illegal passing
4 Pointers
- Driving by a person less than 21 years old after consuming alcohol or drugs
- Speeding great than 75 when posted speed is less than 70 mpb or speeding greater than 80 when posted speed is 70 or greater
- Failure to stop for a school bus
- Reckless driving
- Hit and run/PD (property damage)
8 Pointers
- Aggressive driving
- Driving while license suspended or revoked
10 pointers
- Speeding to elude arrest
- Racing
12 pointers
- Transporting illegal whiskey
- Driving while intoxicated
- Driving under the influence of drugs
- Hit and Run/BI (bodily injury) or death
- Prearranged racing
- Manslaughter (or negligent homicide)
Accidents and the points associated with them
- 1 point – PD less than $2300; NO BI or BI less than or equal to $1800
- 2 point – PD greater than $2300 but less than $3850; BI less than or equal to $1800
- 3 point – PD $3850 or greater; BI greater than $1800
Symbols
The “symbols” for each vehicle are provided to all insurers and help us determine premiums on a vehicle. The higher the symbol the higher the premium. Symbols can range from 1-100. There are two symbols for each vehicle, one for comprehensive and one for collision. These basically tell us how expensive a vehicle is to repair as well as how likely it is to suffer a total loss in the event of a collision.
Coverages
Bodily injury – covers injuries sustained by the adverse party up to the limits on the at fault insured’s policy
Property Damage – pays to repair damages caused by the at fault insured up to limit on policy
Medical Payments – paid out to anyone injured in an accident whether at fault or not up to limit on policy
Uninsured Motorist Property Damage – pays to fix an insured’s vehicle when damaged by a party that is uninsured minus a $100 deductible
Uninsured/Under-insured Motorist Bodily Injury – covers injuries sustained by an insured who is hit by someone with no insurance or not enough bodily injury coverage to cover the damages
Comprehensive (other than collision) – simply put anything other than a collision, however, animal collision is covered here. Glass is also covered under this coverage in NC. Repairs are made minus the deductible chosen on your policy.
Collision – if at fault in an accident and your car needs repair this covers it minus the deductible chosen on your policy.
Rental Reimbursement – pays for a rental car while your vehicle is in the shop due to a comprehensive/collision claim. Max is 30 days worth of coverage here.
Towing and Labor – this is a reimbursement coverage and pays for towing and labor expenses including but not limited to: a tow, changing a tire, locking your keys in the car, dead battery , etc.
Repair and Replacement Coverage – if you car is totaled in a collision we will buy you a new old stock version of your current car within a 5 years time frame. For example, you have a 2013 vehicle that experiences a total loss. We would buy you a new version of your vehicle, the oldest new one on the lot, same specs, etc minus your collision deductible.
Inexperienced Operators (IE)
For those individuals with less than 3 years driving experience there is a surcharge applied to NC auto policies. This can vary from company to company but it is NOT CHEAP. Most of the drivers that incur this are new 16 year old licensees but can also include foreigners moving in from another country.
Final Tips, Pointers, Etc
If you rear end someone YOU ARE ALWAYS AT FAULT. There is no need to try to justify yourself because it won’t help LOL.
In NC, YOU ONLY REPORT THE ACCIDENT TO THE AT FAULT PARTIES INSURANCE COMPANY, NO NEED TO CALL YOUR AGENT/COMPANY IF YOU WERE NOT AT FAULT. Notice the caps, save yourself some time!
If in an accident, stop and check for injuries, call police to file a report, and never admit fault (even if you rear end someone).
Lastly, buy limits recommended by an agent for your situation. If you have assets you need more than the state minimum required limits. Remember, if you exhaust your limits you are personally responsible for the remaining claim balance.
I really hope this information is helpful for you. If you have any questions, please comment below and I will answer them for you.
Cheers,
The Insurance Man
Charlotte Insurance Man 