What North Carolina Drivers Need to Know About the Auto Liability Law Changes

North Carolina’s auto liability laws underwent major changes in 2025. These changes directly affect drivers, injured individuals, and anyone purchasing auto insurance. At KD Trial Lawyers, we believe people deserve clear, accessible explanations of how these updates impact their rights. Here’s what North Carolina drivers need to know about the auto liability law changes, new requirements, and why they matter.

Minimum Liability Coverage Limits Are Increasing

Beginning July 1, 2025, North Carolina raised the minimum auto liability coverage required for all drivers. These updated limits increase the amount of available compensation for people injured in a crash. The new minimum policy now includes:

$50,000 for injuries or death of one person
$100,000 for injuries or death of two or more people
$50,000 for property damage

These changes are designed to reflect rising medical costs, higher vehicle repair expenses, and the reality that past minimums often failed to fully cover the losses suffered in serious collisions.

Read more at the North Carolina General Assembly.

Uninsured and Underinsured Motorist Coverage Has Expanded

Another important auto coverage change involves uninsured motorist (UM) and underinsured motorist (UIM) coverage. Policies issued or renewed under the new rules will automatically include:

UM bodily injury coverage
UM property damage coverage
UIM bodily injury coverage

These protections must match the policy’s bodily injury liability limits unless the policyholder affirmatively chooses otherwise. This is a major win for consumers. It means more drivers will have meaningful coverage in situations where the at-fault driver either has no insurance or doesn’t have enough insurance to cover the full extent of the harm.

Read more at the North Carolina General Assembly.

North Carolina Still Prohibits “Stacking” Policies

North Carolina’s motorvehicle liability laws continue to prevent policyholders from stacking multiple UM or UIM coverages across different vehicles listed on the same policy. In other words, if you insure multiple cars, you cannot combine their coverage limits to increase the total amount available after a collision.

Some states allow stacking, but North Carolina does not. This limitation makes choosing adequate policy limits and understanding UM/UIM coverage especially important.

Rules on Proving Medical Expenses

North Carolina’s new auto liability law changes limit how injured people can prove past medical expenses in court. Rule 414 designates:

Only the amounts actually paid to satisfy medical bills, and
The amounts actually necessary to satisfy outstanding bills may be introduced as evidence.

This rule is unfair. South Carolina does not have this rule, and it makes a difference in case value.

Read more at the North Carolina General Assembly.

Medical and Insurance Liens Are Capped to Protect Injured Clients

When someone receives medical care after a crash, various entities such as hospitals, doctors, and insurance companies may place liens on a settlement or verdict. North Carolina caps how much these lienholders can collect. The general rule: Liens cannot take more than 50% of the injured person’s total recovery, after attorney fees.

This prevents situations where an injured individual wins a settlement but receives very little after liens are paid. The cap ensures that clients keep a fair portion of the compensation they fought for.

Read more at the North Carolina General Assembly.

What These Changes Mean for Injured People

These updates reflect North Carolina’s effort to modernize auto liability laws and improve protections for the public. For people injured in accidents, this may mean:

More available insurance coverage
Better protection when hit by an uninsured or underinsured vehicle

However, with increased protections also come increased legal complexities. Navigating liability limits, UM/UIM elections, medical billing rules, and lien reductions requires careful and experienced legal strategy.

KD Trial Lawyers Can Help You Navigate the Auto Liability Law Changes

Our team at KD Trial Lawyers has extensive experience handling motor vehicle cases throughout the state. We understand how these new North Carolina auto liability law changes influence insurance negotiations, case valuation, and litigation strategy.

If you’ve been injured in a crash or simply want to understand how these changes impact your coverage, our attorneys are here to guide you. Contact KD Trial Lawyers today for a free consultation.