Major Law Changes to NC Auto Insurance Are Here: This is What You Need to Know

If you drive a car in North Carolina, the new major law changes to NC auto insurance has just rolled out and this is what you need to know. And as someone who talks to folks about insurance every single day, I’m here to break it down for you in plain English.

1. Bigger Required Coverage = Bigger Premiums

Starting July 1, 2025, the minimum required liability limits for auto insurance in North Carolina are increasing. Here’s what that means:

  • Bodily Injury Coverage will increase from $30,000 per person / $60,000 per accident to $50,000 per person / $100,000 per accident
  • Property Damage goes from $25,000 per accident to $50,000 per accident

Translation? If you’re carrying the current minimums (which a lot of people are), you’re going to see a rate increase when your policy renews. Why? Because the insurance company is now on the hook for more coverage. You’ll be better protected—but you’ll also be paying for it.

2. Underinsured Motorist Coverage Becomes Standard

Right now, not all policies include underinsured motorist coverage—but as of July 1, 2025, it will be automatically included in all new and renewing policies.

This is actually a good thing. It means if you’re hit by someone who doesn’t have enough insurance to cover your damages, your policy will kick in and help make up the difference.

And for the insurance nerds reading this (I see you!), here are some key changes:

  • Whether a vehicle is considered “underinsured” will now be based on your total damages, not just how much coverage the other driver had.
  • Your coverage won’t be reduced by other types of insurance (except workers’ comp).
  • If you’re covered under multiple policies, your benefits can be stacked—meaning you get the highest limits available from each.

This is one of those changes that protects you better, but yes, it will probably increase your premium a little too.

3. New Drivers Will Pay Surcharges for Longer (Yep, 8 Years)

Here’s one that’s going to sting for new drivers before the new major law changes to NC auto insurance take place:
Currently, if you’ve been driving for less than 3 years, you pay a surcharge (basically a penalty for being new).

Starting July 1, 2025, that timeframe is increasing to 8 years for anyone who gets their license on or after that date.

Now, to be fair, the surcharge isn’t as high in years 4–8 as it is in years 1–3. But still…if you’re a new driver, buckle up—your rates are going to be higher for longer. (Which is a great reason to call me and shop around.)

4. More SDIP Points = Longer Rate Penalties

Let’s say you get a ticket that hits you with 4 or more Safe Driver Incentive Plan (SDIP) points. Right now, you’re looking at a 3-year surcharge on your premium.

As of July 1, 2025, that increases to 5 years—for serious violations that rack up 4+ points (excluding certain speeding violations, which I’ll explain next).

So if you’re the type to get “creative” behind the wheel, just know those points will follow you around longer than they used to.

5. Speeding Tickets & PJCs: Lookback Periods Jump to 5 Years

Here’s where things get a little tricky. If you:

  • Get caught speeding 10 mph or less over the posted speed limit
  • OR get a Prayer for Judgment Continued (PJC) for a violation

Then as long as you had a clean record for 3 years, that violation wouldn’t raise your insurance rates.

But for offenses on or after July 1, 2025, that “lookback” period becomes 5 years. So now, if you’ve had any tickets or PJCs in the past 5 years, your clean-slate forgiveness might not apply.

(And if you’re wondering—yes, this still excludes speeding in a school zone. That one’s always counted.)

Final Thoughts (And a Friendly Reminder)

I’ve been doing this a long time. And if there’s one thing I’ve learned, it’s this: most people don’t know what they’re actually paying for when it comes to insurance. That’s not your fault. The system isn’t exactly designed to be transparent.

But that’s why I’m here. I’ll help you understand the changes, figure out what coverage actually makes sense, and shop around to find you the best deal—because as an independent agent, I don’t work for the insurance companies. I work for you.

If you’re not sure how these July 1st changes will affect you, click the button below and let’s talk. I’ll review your current policy for free and let you know where you stand.

Get a quote!

Let’s make sure you’re protected—without overpaying.

—

Eli Alcorn
Independent Insurance Agent
Helping North Carolina drivers stay covered (and save money doing it)


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