North Carolina Auto Insurance Law Updates Effective July 1, 2025: What Every Driver Must Know
By Adam J. Langino, Esq.
North Carolina Auto Insurance Law Updates Effective July 1, 2025: What Every Driver Must Know
Starting July 1, 2025, North Carolina drivers will face significant changes to auto insurance laws. These updates—passed through Senate Bill 452 (Session Law 2023-133) and Senate Bill 319 (Session Law 2024-29)—raise minimum coverage limits and overhaul uninsured and underinsured motorist protections. As a Chapel Hill-based law firm that handles car accident, truck accident, catastrophic injury, wrongful death and personal injury claims across North Carolina we want to break down these changes so you can protect yourself and your family.
Why These Changes Matter
Auto insurance laws exist to ensure that drivers can cover damages and injuries caused in an accident. But as medical costs and vehicle repair expenses rise, North Carolina’s old minimum coverage limits were no longer enough. The new law aims to provide better financial protection for accident victims and reduce the risk of out-of-pocket expenses for drivers.
New Minimum Auto Insurance Requirements
Effective July 1, 2025, the minimum liability coverage for all new or renewed policies is:
Bodily Injury:
$50,000 per person
$100,000 per accident
Property Damage:
$50,000 per accident
This replaces the old 30/60/25 limits. These higher limits apply only to policies issued or renewed on or after July 1, 2025.
Why This Matters
If you cause an accident, these limits determine how much your insurance will pay for injuries and property damage. While the increase offers better protection for victims, it also means higher premiums for drivers. However, the added security is worth it—especially when serious accidents can easily exceed old limits.
Uninsured Motorist (UM) Coverage: Still Mandatory
North Carolina law continues to require Uninsured Motorist coverage on every auto policy. If you’re hit by a driver with no insurance, UM coverage pays for:
Medical bills
Lost wages
Property damage
The minimum UM limits now match the new liability limits: $50,000 per person / $100,000 per accident / $50,000 property damage.
Underinsured Motorist (UIM) Coverage: Now Mandatory
Previously optional, Underinsured Motorist coverage is now required on all new and renewed policies. This is a major change.
What UIM Coverage Does
UIM coverage protects you when the at-fault driver’s insurance isn’t enough to cover your damages. For example:
The other driver has $50,000 in liability coverage.
Your medical bills total $80,000.
Your UIM coverage can pay the $30,000 difference (up to your policy limits).
Key Updates to UIM Rules
Mandatory inclusion: Every policy now includes UIM coverage at least equal to the new minimum limits.
No liability setoff: Before July 2025, UIM benefits were reduced by the amount paid by the at-fault driver’s insurer. That offset is gone. You can now collect the full UIM amount in addition to liability payouts.
Definition change: Underinsurance is now based on total damages, not just the other driver’s policy limits.
What Is Stacking and Why Does It Matter?
Stacking refers to the ability to combine coverage limits from multiple vehicles insured under separate policies to increase the total amount available for an uninsured or underinsured motorist claim. Under North Carolina’s updated law, inter-policy stacking is now allowed for UM (Uninsured Motorist) and UIM (Underinsured Motorist) coverage.
How Stacking Works
Imagine you own two vehicles, each insured under its own policy with $50,000 in UIM coverage. If you’re injured in an accident where the at-fault driver’s insurance is insufficient, you can now “stack” the coverage from both policies, giving you $100,000 in total UIM protection. This can make a huge difference in serious accidents where medical bills and damages exceed the limits of the at-fault driver’s insurance.
Benefits of Stacking
Greater Financial Protection: Stacking provides an extra layer of security by allowing you to access higher compensation levels without relying solely on the at-fault driver’s insurance.
Flexibility for Multi-Vehicle Households: If you own multiple cars under separate policies, stacking can significantly increase your available coverage.
Peace of Mind: With North Carolina’s high rate of uninsured drivers, stacking ensures you’re better prepared for worst-case scenarios.
While stacking offers more protection, it may also lead to higher premiums. It’s important to review your policies and speak with your insurance agent about whether stacking is right for you.
Other Notable Changes Explained
Inexperienced Driver Surcharge Extended
What changed: The surcharge period for drivers who are newly licensed is increasing from 3 years to 8 years.
Why it matters: If you’re a new driver (licensed on or after July 1, 2025), you’ll pay higher premiums for a longer time. This change reflects the higher risk associated with inexperienced drivers, but it also means budgeting for higher insurance costs for nearly a decade.
Safe-Driver Surcharge Increased
What changed: Violations that carry 4 or more Safe Driver Insurance Plan (SDIP) points will now result in a surcharge lasting 5 years instead of 3 years.
Why it matters: Serious traffic violations—such as reckless driving or major speeding—will impact your insurance rates for a longer period. Maintaining a clean driving record is more important than ever.
Minor Speeding & Prayer for Judgment Continued (PJC) Lookback Extended
What changed: The lookback period for assigning insurance points for minor speeding violations and PJCs is increasing from 3 years to 5 years.
Why it matters: Even relatively minor infractions will affect your insurance premiums for a longer time. PJCs, which previously offered some relief, will now have extended consequences. This change encourages safer driving habits and reduces reliance on PJCs as a quick fix.
Practical Tips for Drivers
Review your current policy and consider increasing your liability limits beyond the minimum.
Confirm that your UM/UIM coverage is adequate for your needs.
Drive safely—violations now have longer-lasting financial consequences.
Budget for potential premium increases starting July 2025.
FAQs About North Carolina Auto Insurance Law Changes
1. Do these changes apply to my current policy?
No. They apply only to policies issued or renewed on or after July 1, 2025.
2. Will my premiums go up?
Yes, most drivers will see an increase due to higher minimum limits and mandatory UM/UIM coverage. However, the added protection is significant.
3. Can I still choose higher coverage limits?
Absolutely. In fact, we recommend it. Higher limits provide better protection and peace of mind.
4. What happens if I’m hit by an uninsured driver?
Your UM coverage will pay for your damages up to your policy limits.
5. How does stacking work for UIM coverage?
Stacking allows you to combine UIM coverage limits from multiple vehicles insured under separate policies to increase the total amount available for your claim. For example, if you have two vehicles, each with $50,000 in UIM coverage under separate policies, you can stack them for $100,000 in total protection. This can be crucial in serious accidents where medical bills and damages exceed the limits of the at-fault driver’s insurance.
About Langino Law PLLC
Langino Law PLLC is a personal injury law firm in North Carolina, based out of Chapel Hill, dedicated to helping individuals and families recover after catastrophic injuries and wrongful deaths. Founded by nationally recognized trial attorney Adam Langino, our firm brings over a decade of courtroom experience and a proven track record of multimillion-dollar settlements. Please remember that each case is unique and has specific facts and circumstances. These past results are not a guarantee of future outcomes in any case.
We proudly serve clients throughout Chapel Hill, NC, and across North Carolina, handling complex cases involving negligent security, serious car accidents, dangerous consumer products, truck accidents, and corporate accountability. At Langino Law, we combine local insight to deliver personalized legal strategies that protect your rights and force accountability on those that caused harm.
If you’re searching for a trusted North Carolina personal injury lawyer, based out of Chapel Hill, Langino Law PLLC is here to help. You contact Langino Law PLLC for a free, no pressure consultation, by calling 888-254-3521 or by clicking here.
Need Legal Help After an Auto Accident?
At Langino Law PLLC, we help clients in Chapel Hill and across North Carolina navigate insurance claims and work hard to recover fair compensation. If you’ve been injured in an accident, contact us today for a free consultation. We’ll review your coverage, explain your rights, and help you maximize your recovery.
Call us now at 888-254-3521 or Contact Us to schedule your consultation.