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North Carolina Residents – Your Auto Insurance Responsibilities

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Prior to obtaining auto insurance quotes, residents of North Carolina should be aware of their financial responsibilities in relation to state laws. The Financial Responsibility Act (1957) requires all motorists to be accountable for bodily injuries and damage to property if they are deemed to be at fault in a road traffic accident. The act was introduced as a means of ensuring adequate compensation is place should any third party sustain injuries or losses after an incident where another driver is found to be responsible.

To comply with state laws, all motorists should make sure that their car insurance quotes offer at least the minimum level of mandatory coverage requested. For residents of North Carolina, this equates to $30,000 of bodily injury liability per person and $60,000 of bodily injury liability per accident. In addition, $25,000 of property damage liability cover must also be in place. State law has also made it compulsory to carry $30,000 of underinsured and uninsured motorist coverage per person and $60,000 of underinsured and uninsured motorist coverage per accident. These requirements came into effect in January 2009 and are an important consideration on all auto insurance quotes.

North Carolina residents must carry proof of insurance in their vehicles at all times and driving without adequate coverage can lead to a series of penalties. If a policy is cancelled or remains unpaid, the carrier is legally obliged to contact the North Carolina Department of Motor Vehicles. A FS 5-7 form will be sent out to the policyholder informing them of a lapse in coverage and this must be returned within a ten-day period. Occasionally, a lapse in coverage may simply be due to an administration error and policyholders can enter their correct details on the form and return it for a fast and effective resolution to the problem. If a break in coverage is valid, motorists should look to obtain new auto insurance quotes and make a purchase so that recertification can take place. This information must also be submitted within ten days and will result in a civil penalty.

Civil penalties can vary greatly depending on the severity of the violation but a first lapse in insurance coverage will incur a fine of $50. A second violation will result in a fine of $100 while all subsequent penalties are set at a limit of $150. Failure to respond to a FS 5-7 form is looked upon seriously and can result in the loss of driving privileges for up to thirty days. License plates can only be gained again once a FS-1 form has been completed. In addition, a $50 service fee and standard licensing costs will apply.

Even if monthly payments on an insurance plan become difficult to meet, they can still be significantly cheaper than having to continually pay for new policies, fines and service fees. If payment for an installment plan is becoming a problem, talk to your insurance company before the policy is cancelled as many carriers will try to help by spreading out costs a little further during times of financial hardship.

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