Jane Dotson
In North Carolina, drivers are legally required to carry a minimum amount of auto insurance. One alternative to purchasing a policy is to apply for a self-insurance license from the Commissioner of Motor Vehicles. To be eligible, you must own or lease 26 or more cars under your name and be able to demonstrate your financial ability to satisfy payments for injuries caused by accidents.
| Characteristics | Values |
|---|---|
| Who can be self-insured? | Individuals who own or lease 26 or more cars under their name |
| Requirements | Documents proving financial standing, such as financial or income statements |
| Alternative options to self-insurance | Surety Bond |
| Security Deposit/Cash | |
| Real Estate Bond |
What You'll Learn
Self-insurance eligibility
In North Carolina, self-insurance is one of the alternative options to traditional car insurance that satisfies the state's requirement that all drivers carry motor vehicle insurance. Self-insurance is an option for those who own or lease 26 or more cars under their name. When applying for a self-insurance license, the Commissioner will ask for documents that prove financial standing, such as a statement of income and/or financial statement. Only applicants who can demonstrate their financial ability to satisfy payments for injuries caused by accidents may be self-insured.
The process of becoming a self-insurer involves applying to the Commissioner of Motor Vehicles, who will then issue a certificate of insurance. The Commissioner will ask for documents proving the financial standing of the applicant. This can include financial or income statements. The Commissioner will only issue a certificate to those who can demonstrate their financial ability to satisfy payments for injuries caused by accidents.
Self-insured individuals are responsible for paying for any damage caused by their vehicles out of their own funds. This means that if any of their insured cars are involved in an accident, they will need to cover the costs of any resulting damage or injuries using their personal finances.
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Financial requirements
In North Carolina, self-insurance is one of several alternatives to carrying a car insurance policy. The other options are a surety bond, a real estate bond, or a cash/security deposit.
To qualify for self-insurance, you must own or lease at least 26 cars under your name. When applying for a self-insurance license, the Commissioner will ask for documents that prove your financial standing, such as a statement of income and/or financial statement. Only applicants who can demonstrate their financial ability to satisfy payments for injuries caused by accidents may be self-insured.
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Minimum insurance coverage
In North Carolina, drivers are required by law to carry a minimum amount of auto insurance. This includes liability coverage, uninsured motorist coverage, and underinsured motorist coverage. Here is a breakdown of the minimum insurance coverage requirements in North Carolina:
Bodily Injury Liability Coverage:
Minimum legal requirement: $30,000 per person and $60,000 per accident.
This coverage pays for the other driver's medical bills if you are found to be at fault in an accident. It also covers your legal fees if the other party sues you, up to the stated limit.
Uninsured Motorist Bodily Injury:
Minimum legal requirement: $30,000 per person and $60,000 per accident.
This coverage protects you if you are injured in an accident caused by an uninsured driver. In this case, your insurance company steps in to cover the costs related to your injury.
Uninsured/Underinsured Motorist Property Damage:
Minimum legal requirement: $25,000 per accident.
This coverage protects you if your property is damaged in an accident caused by an uninsured or underinsured driver.
Property Damage Liability Coverage:
Minimum legal requirement: $25,000 per accident.
This coverage pays for any damage to the other driver's property, such as their vehicle or other property damaged in the accident (buildings, fences, etc.).
It is important to note that while these are the minimum requirements, higher coverage limits are available and may be worth considering for added protection. Additionally, North Carolina law permits alternative options to traditional insurance, such as surety bonds, self-insurance (for those who own or lease 26 or more cars), security deposits, or real estate bonds.
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Proof of insurance
In North Carolina, drivers are legally required to carry their insurance ID cards with them while driving at all times. If a law enforcement officer asks to see their ID card, they are required to present it.
The following specific documents are required as proof of insurance:
- DL-123 certification from an insurance agent
- A copy of your policy declaration page
- An insurance binder copy
In addition to the above, North Carolina drivers must carry minimum general car insurance. They must also carry uninsured and underinsured motorist coverage.
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Insurance alternatives
In North Carolina, self-insurance is one of the alternatives to carrying a car insurance policy. However, this option is only available to those who own or lease at least 26 cars. When applying for a self-insurance license, the Commissioner will ask for documents that prove your financial standing, such as income or financial statements. Only applicants who can demonstrate their financial ability to satisfy payments for injuries caused by accidents may be self-insured.
You can submit a surety bond worth at least $85,000 as proof of financial responsibility. A surety bond guarantees that you will be able to make payments to the injured party after causing an accident. If you are unable to pay up to the guaranteed amount, the company that issued the bond will pay the bills and then collect from you.
Security Deposit/Cash
You can choose to make an $85,000 deposit using cash or another type of security, such as a government bond or note, to the State Treasurer. In exchange, the Commissioner will provide a certificate that satisfies the legal requirement for carrying minimum amounts of driver's insurance.
Real Estate Bond
This option involves providing a real estate bond that guarantees payment of up to $85,000 per accident. If you cause an accident and fail to make the necessary payments, the Commissioner can appropriate and sell the real estate assets to cover the payments.
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Frequently asked questions
Self-insured auto refers to individuals who own or lease 26 or more cars under their name and have applied to become a self-insurer.
To qualify as a self-insurer in North Carolina, one must submit documents proving their financial standing to the Commissioner. Only applicants who demonstrate their financial ability to satisfy payments for injuries caused by accidents may be self-insured.
Self-insured auto allows individuals to bypass the need for a traditional insurance policy and instead utilize their own financial resources to cover any expenses arising from automobile accidents.
If any of the self-insured individual's cars are involved in an accident, they will be responsible for using their own funds to pay for any resulting damages or injuries.
Self-insured auto in North Carolina is only available to those who own or lease a significant number of vehicles (26 or more) and can demonstrate their financial ability to cover potential expenses related to automobile accidents.
