Best Car Insurance in North Carolina

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In North Carolina we’ve got it pretty good — we pay the lowest car insurance rates in the nation. The state legislature has the power to cap auto insurance premiums and wields it, which brings our average down to over $1,000 a year. Compared to Michigan, where rates are typically $2,476, we’re getting a pretty good deal on our premiums, no matter what. But, why stop there? It’s easy to save even more with just a little bit of shopping around.

When I called around for quotes for minimum coverage, I found that I could save $468 a year for the exact same coverage simply by picking one insurer over another. Of all my quotes, Auto-Owners was the cheapest (they quoted me $1,034 a year) and I wish that I could easily say that it would be the best car insurance option for you, too. Unfortunately, auto insurance rates are so personalized that there’s no way I can recommend just one company as the best value for everyone.

Insurance agencies use a number of factors to calculate their rates including age, vehicle type, driving history, and even ZIP code. On top of that, every insurer uses their own formula to weigh these factors. The only way to find the company with the lowest rate for you is to do a bit of legwork. You’ll need to get a bunch of quotes and compare; I’d recommend getting about five.

Luckily, getting a quote online is pretty easy. It takes only 5 to 10 minutes — and you only a need a few basic pieces of info like the make, model, average annual mileage of your car, and its VIN number. If you do have to make a call, expect to add an extra 10 minutes to the process.

Find the Best Car Insurance

Enter your ZIP code below and be sure to click at least 2-3 companies to find the very best rate.

I started my search search by getting quotes from these five companies — they all meet my criteria for customer service and financial stability — and I’d recommend anyone in North Carolina start with these as well.

Insurer My quote
Auto-Owners Insurance $1,034
Progressive $1,054
North Carolina Farm Bureau $1,166
State Farm $1,282
Allstate $1,502

I chose these five for their stellar customer service and financial stability. They each have an “above average” (or higher) JD Power rating in the Southeast and a minimum A.M. Best rating of “Excellent.” JD Power ranks customer service satisfaction surveys and A.M. Best scores insurance companies based upon their financial solvency. Statistically speaking, you’re going to get in a wreck every 17.9 years. When that happens, you’ll need to be able to trust that your insurer will not only be there for you with great customer service, but that they’ll have the money pay your claim too.

Auto-Owners Insurance was the best car insurance option for me, and Progressive came in a close second at $1,054. North Carolina Farm Bureau and State Farm landed in the middle. And for no obvious reason, Allstate asked for just over $1,502 a year. It would take some very special service for me to spend $468 more on minimum insurance. In fact, instead of paying more for the same minimum coverage, I’d recommend investing in better coverage.

Even If You’re Happy, It’s Best to Shop for a New Policy Every Couple of Years

Insurance providers used to calculate rates based on risk alone. That’s no so anymore. Nowadays, companies use big data and personal information (like one’s online shopping habits and social media activity) to gauge a customer’s tendency to shop for the best price. This tactic is called price optimization, and a study by Earnix found that 62 percent of insurers polled were either already using price optimization or had plans to incorporate it. Essentially, it allows companies to charge just enough to maximize profit with incremental price increases, but not too much to make loyal customers uncomfortable with their rates.

That’s why it’s best to shop for a new policy every few years. Applying for quotes with as many companies as you can handle will not only help find potential savings; it will also keep your present insurer from hiking your rates without good reason. Insurance companies are privy to your dealings with other providers, and once they find out you’re a savvy shopper, they won’t be as likely to gouge you.

If you have noticed incremental, unexplainable increases in your premium, contact your agent and demand an answer as to why. And if they can’t give you a solid explanation, it’s safe to assume you’ve become a victim to price optimization and there’s money to be saved with another provider.

Fifteen states, including Ohio and California, have released legal bulletins addressing the use of price optimization based on non-risk factors (i.e. willingness to look for better prices). Many states have gone so far as to ban the practice altogether while others, like Vermont, have mandated transparency on the factors used to calculate rates. Unfortunately, North Carolina has not released any statements regarding price optimization practices, hasn’t banned anything, and doesn’t require transparency. For now, you’ll need to stay on your toes and look around for competitive quotes in order to beat the system.

North Carolina’s Minimum Coverage

The Bare Minimum

The quotes I got were for North Carolina’s minimum coverage — it’s what you have to have to legally drive in the state. North Carolina requires two types of insurance: liability and uninsured motorist coverage. Liability coverage pays for any bodily injury and property damage caused by the driver. You’re required to have at least $30,000 bodily injury per person, $60,000 total bodily injury for all people in an accident, and $25,000 to cover property damage. In insurance speak, that’s a 30/60/25 plan.

There is one additional rule that you should be aware of: If you purchase more than the state’s minimum coverage, you have to increase both your uninsured motorist and underinsured motorists coverage together. You can’t increase them separately.

The Best Car Insurance is Not Just Cheap Car Insurance

Getting more coverage than the state mandates will cost a little bit more, but it can pay off in a big way. Let’s take a look at two important stats:

  • On average drivers have an accident every 17.9 years. I’m willing to assume, I’m no exception.
  • The average cost of an accident that causes a disabling, but nonfatal injury is $79,400. If I hit a more expensive car or cause even more complicated injuries then that could easily be a lot higher.

If I just sign up for North Carolina’s minimum coverage ($30/60/30 Bodily and Damage Liability) it’ll cost me $1,166 a year. Let’s imagine that I get in a wreck and permanently injure someone — after the damage and the hospital bills, I’d likely owe something like $70,000. With only the state’s minimum coverage of $30,000, I might wind up being responsible for the remaining $40,000 of those damages.

To upgrade that coverage to include $50/100/50 of bodily injury and property damage liability with $25,000 of uninsured/underinsured motorist coverage, I’d pay a bit more annually, but I’d only wind up paying $20,000 out of my own pocket. For me, the upgrade is worth the peace of mind and the protection to my savings accounts.

If You Skip Coverage, It’ll Cost You

Driving without insurance is never a good idea, but if you do, penalties for driving without mandatory coverage in North Carolina will result in fines from $50 to $150. Plus your license will be suspended for 30 days, and you’ll have to pay an extra $50 License Reinstatement Fee. (Of course, if you have to take a taxi to work that month, there’s another couple hundred dollars gone, too.) You’ll also risk spending as many as 45 days on probation or even doing some jail time. Plus, without insurance, if you do get into an accident you’re on the hook for the full damages. I personally don’t have $80,000 in my saving account that I’d be happy to wipe out.

Find the Best Car Insurance

Enter your ZIP code below and be sure to click at least 2-3 companies to find the very best rate.

Beat the Average Premium

Since there are a ton of factors that affect your rates, there are also a lot of ways to drive your already cheap car insurance down ever further. Take a look at the average premium costs for ten major cities in the state and a few ways you might be able to beat the average. (Just getting a few quotes and comparison shopping will put you ahead of the game already.)


Why are North Carolina’s rates so low?

First, it is a predominantly rural state. North Carolina’s 90.5 percent rural landmass only leaves a meager 9.5 percent in urban classification, which insurance companies consider riskier because they’re more densely populated and are likely to have higher crime and accident rates.

Secondly, the Insurance Commissioner of North Carolina wields the power to cap insurance rates. In 2014, the insurance companies tried to change that by initiating a bill called the “Good Driver Discount Bill.” The name was a simple ruse to mask the true intent: To give insurance companies the choice to opt out of the current cap-system and increase their rates. Closely related legislation passed in South Carolina back in the 90’s, and rates saw a 23 percent increase shortly following. Luckily for North Carolina’s drivers, the bill did not pass.

Expert’s Corner

The Simple Dollar turned to a few lawyers familiar with personal injury cases if we’re right to recommend spending a few more dollars in the short run. Here’s what they had to say:

Absolutely, yes! If you go to an insurance salesman and simply say, “Just give me the minimum,” or, “Give me the cheapest,” the coverage you will have will be very easy to exceed, even in a simple auto accident. —Bryan Larson, Larson Law

Drivers should consider more than minimum coverage in order to protect their assets. If you are in a car wreck and are sued, your insurer will pay up to your policy’s coverage limits. If an injured party has damages (medical expenses, lost wages, or pain and suffering) that exceed your policy limits, you could be on the hook personally for that excess amount. I can tell you from experience representing individuals injured in car wrecks, it does not take long for medical expenses to reach and exceed $25,0000. — Katherine Rutledge Silver, Strain & Rutledge

Absolutely! Any type of collision with a serious injury could put another person into intensive care, where the costs of care could mount at $50,000 or more per day. Surgery drives the costs up even further. Future lost wages for a permanent disability can reach into the millions. If a huge claim is made against the driver with minimum limits, that driver will almost invariably be driven into bankruptcy, unless they have little or no assets or income from which to collect the judgment. —Joseph C. Hangarter, Charles County Law

The Bottom Line

Insurance policies are so personalized, there’s no way to recommend one company over another as the best for absolutely everyone. The only way to find the best deal is to get quotes and compare prices and coverage levels. I was able to find $468 in savings and it only took me an hour. And who knows, you might be able to do the same — but you won’t know until you apply for some quotes. Have at it!

Find the Best Car Insurance

Enter your ZIP code below and be sure to click at least 2-3 companies to find the very best rate.

Best Car Insurance in North Carolina

  • Auto-Owners Insurance
  • Progressive
  • North Carolina Farm Bureau
  • State Farm
  • Allstate