Upcoming Auto Insurance Changes in North Carolina for 2025

The North Carolina General Assembly has recently passed significant legislation impacting vehicle insurance in the state. As we approach the effective date of July 1, 2025, it’s crucial for North Carolina drivers and insurance policyholders to understand these changes. While some details are still being finalized, this article provides an overview of the key modifications to auto insurance that will affect rates and coverage.

Key Changes Coming in 2025

1. Increased Minimum Liability Limits

Starting July 1, 2025, the minimum liability coverage requirements for auto insurance policies will see a notable increase:

• Bodily Injury Liability: The minimum limits will rise from $30,000 per person and $60,000 per accident to $50,000 per person and $100,000 per accident.
• Property Damage Liability: The minimum limit will change from $25,000 per accident to $50,000 per accident.

These adjustments aim to ensure that drivers have sufficient coverage to protect themselves and others in the event of an accident, thereby enhancing financial security for all road users.

2. Uninsured and Underinsured Motorist Coverage

Effective July 1, 2025, all new and renewal liability policies must include both Uninsured Motorists (UM) and Underinsured Motorists (UIM) coverage. This change is particularly important as it aims to provide additional protection for drivers involved in accidents with uninsured or inadequately insured motorists.

• Broadened UIM Coverage: The statutory language has been updated to expand the scope of UIM coverage, although the specific rates for this coverage have not yet been determined by the North Carolina Rate Bureau and the North Carolina Reinsurance Facility.

3. Changes to Prayer for Judgement Continued (PJC)

As of July 1, 2025, a Prayer for Judgement Continued (PJC) for any violation will not carry a premium surcharge unless there is another PJC within the prior five years. This change expands the current period from three years to five years, offering some relief for drivers who have previously received a PJC.

4. Extended Inexperience Period for New Drivers

Drivers obtaining their licenses for the first time on or after July 1, 2025, will face an increased inexperience period. This period will extend from three to eight years, meaning that new drivers may encounter higher insurance premiums for a longer duration.

• Inexperienced Driver Discounts: The legislation may also introduce “discounts” for inexperienced drivers who remain accident-free and conviction-free during this extended period. However, specific details regarding these discounts are still under discussion.

5. Changes to Major Convictions

Effective July 1, 2025, any major convictions resulting in four or more points (excluding speeding violations) will have a chargeability period of five years, up from the previous three years. This change aims to better reflect a driver’s record over time and could impact insurance rates for those with significant violations.

6. Waivable Speeding Convictions

Speeding convictions of less than 10 miles per hour over the posted limit will still be eligible for waiving, provided there are no other chargeable convictions (excluding a PJC) in the previous five years. This change is designed to offer leniency for minor speeding violations, allowing responsible drivers to avoid surcharges.

What This Means for North Carolina Drivers

The changes to auto insurance laws in North Carolina set to take effect in 2025 are designed to enhance coverage, improve financial responsibility, and ensure fairer premiums for all drivers. As the implementation date approaches, drivers should consider the following:

• Review Your Current Coverage: With increased minimum liability limits, it’s essential to review your current policy to ensure it meets the new requirements.
• Stay Informed: Keep an eye on updates from the North Carolina Rate Bureau and your insurance provider regarding the specifics of the new rates and coverage options.
• Consult Your Insurance Agent: Speak with your insurance agent about how these changes will affect your premiums and coverage. They can provide tailored advice based on your individual situation.

Conclusion

As we move closer to July 1, 2025, North Carolina drivers should prepare for significant changes in auto insurance legislation. Understanding these adjustments is vital for ensuring compliance and securing the right coverage. At Harbor Insurance Agency, we are committed to keeping our clients informed and assisting them in navigating these changes effectively. Stay tuned for more updates as we approach the implementation date, and feel free to reach out with any questions about how these changes may affect you!