North Carolina is one of the most affordable states for car insurance, with the average premium costing just $1,154 annually. Overall, the state ranks as the 7th most affordable state for insurance. Of course, the actual cost of an individual’s policy may vary significantly from the average insurance cost. A policy may cost more or less than the state average due to a driver’s history of accidents, traffic violations, DUI convictions or other risk factors. For North Carolina residents or people looking to move to the state, it’s a good idea to understand how car insurance rates are determined so the best price can be found.

North Carolina Car Insurance Rates

Car insurance companies determine the cost of auto policies by assessing a customer’s risk. The higher the likelihood of a person being involved in an accident, the more the insurance policy will cost. Risk factors can be limited to a specific person, but they can also be dependent on the area a vehicle is being driven in. A state’s weather patterns, traffic, crime rate and more can directly influence the probability of a person being involved in an accident. This is why car insurance rates change from one state to the next and even between different zip codes within a city.

In the case of North Carolina, auto insurance premiums are low in part due to the relatively low number of uninsured drivers in the state. Drivers without insurance can still cause car accidents, and when they do, the other person’s insurance company must pay the bill. This results in lost money for the insurance company, and the company must recover the expense by raising premiums throughout the area.

Many of the most expensive insurance states have very high numbers of uninsured drivers. Approximately 12 percent of drivers in North Carolina are uninsured; while higher than some of the most affordable insurance states, this figure is still quite low compared to most of the country. Low insurance premiums encourage more drivers to purchase insurance, which helps to keep the price low for everyone.

Another reason that North Carolina premiums are lower than other states is that drunk driving is not as major of a concern there as it is in other places. In 2009, alcohol-related accidents accounted for 363 driving fatalities in North Carolina. While not a low number by any means, this is substantially lower than major drunk driving states like California or Texas where the fatalities are roughly triple this figure.

Weather is also fairly mild in North Carolina, reducing the likelihood of weather-related claims. Tornadoes and hail are primary causes of vehicle damage. Flooding is another major concern in some areas. While some weather events do occur in North Carolina, especially near the cost, the area’s weather is consistently temperate, which helps reduce the number of vehicles damaged each year.

Theft is also not a major concern in the state. California, Texas and Washington all report very high rates of vehicle theft due to their position near country borders. North Carolina, located further away from the border, has fewer cars stolen each year. Crimes against property play an important role in determining insurance costs; congested urban areas will tend to have higher rates of vandalism than more rural states.

One of the main reasons that car insurance costs vary from one state to the next is that different states have different insurance requirements. Because insurance laws are determined by each state, some states require higher levels of minimum coverage than others. This means that while the average cost of insurance in an area may be higher than the average cost of another state, policies with identical coverage may have very similar costs.

North Carolina Car Insurance Requirements

Auto insurance requirements in North Carolina are higher than in many states, which makes the low premiums in the area an even more impressive value. In order to register a vehicle in the area, a driver must maintain a minimum of $25,000 in property damage liability and $30,000 per person up to $60,000 per accident in bodily injury liability. This is the insurance limit, meaning that the insurance company will not pay more than the policy limit for any claim. Any damage that exceeds the limit would be billed directly to the vehicle’s owner, which is why it’s always a good idea to carry as much liability insurance as you can afford.

North Carolina does not require drivers to purchase additional coverage, but any vehicle that is being leased or financed will need to be insured with collision and comprehensive coverage. This first-party coverage pays for damage caused to the insured vehicle itself. If a driver owns his vehicle outright, he can choose whether or not to purchase full coverage.

Other coverage available in the state includes uninsured motorist insurance, medical payments coverage, rental reimbursement and towing. These can all be purchased separately, so it’s possible to customize a policy with only the coverage a driver needs.

Whether you’ve recently moved to North Carolina or are a resident looking for the best insurance rates, it’s always possible to get a good deal on insurance by comparison shopping online. Once you fill out the form for a free quote, you will be able to compare dozens of insurance companies in the area to find the one that best suits your needs.