Do you know what your auto liability coverage is? If you don’t, you better find out. Starting in 2025, North Carolina will have the strictest minimum liability coverage requirements in the country. But what led to these changes?
The Legislative Background
The bill, introduced by Republican state senators Todd Johnson, David Craven, and Danny Earl Britt, was passed last year. This new law allows victims of car crashes to collect significantly more money from at-fault parties. It was largely influenced by the personal injury attorneys' association and some lobbying efforts in the Senate.
"We understand this came from the trial lawyer’s association and some lobbying took place in the Senate,” said Jason Tyson, the head of communications for the state Department of Insurance.
What is Liability Insurance?
Liability insurance kicks in if you are at fault for an accident; it helps pay for damages to the other driver. Currently, North Carolina's liability coverage requirements are moderate compared to other states.
New Coverage Requirements for 2025
Here’s what changes you can expect if you’re found at fault for an accident:
Current Requirements: Minimum liability coverage includes $25,000 for property damage and $60,000 for injuries.
New Requirements for 2025: Minimum liability coverage will increase to $50,000 for property damage and $100,000 for all injuries caused in the accident.
The Cost of More Coverage
With more coverage comes a higher cost for consumers. WRAL 5 On Your Side, in collaboration with independent insurance agent Turner Walston, analyzed the financial impact. Under the current rules, liability insurance for a female adult with a Volkswagen Tiguan costs $485.34 annually. Under the new rates, this would increase by about $50 to $531.24.
A spokesperson for the insurance industry mentioned that the cost of coverage would rise by about 5% at most.
Is This Beneficial for Drivers?
With the rising cost of new cars and more expensive repair bills due to sophisticated technology, some insurance agents believe this change is beneficial. It ensures that victims of accidents receive more comprehensive financial protection. Despite the hike, North Carolina's prices remain relatively low for comprehensive coverage, which includes liability insurance.
Do Drivers Need to Take Any Action?
Drivers don’t need to do anything as their insurance policies will automatically adjust to the new requirements starting next year.
Conclusion
It's essential to stay informed about these changes and understand how they impact your coverage and costs. For personalized advice and to ensure you have adequate protection, consider consulting with a local insurance expert, such as those at Bill Layne Insurance, your one-stop shop for all insurance needs in Elkin, NC. Remember, at Bill Layne Insurance, our motto is "Shop - Compare - Save."
By staying ahead of these changes, you can ensure that you have the right coverage and are prepared for any eventuality on the road.
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