NCAJ-Backed Bill Could Bring Big Changes for Auto Insurance

September 22, 2023

The hard work and perseverance of NCAJ’s advocacy team and the support of our member-legislators has led to the passage of Senate Bill 452, which could bring about several crucial updates to automobile insurance laws.

The bill passed the House at 12:26 a.m. Friday, supported primarily by Republicans, and passed unanimously in the Senate at 10:27 a.m. with broad bi-partisan support. The bill now goes to Gov. Cooper for his consideration and signature.

The NCAJ advocacy and lobbying team and key volunteer leaders and members shepherded this bill through the legislative process.

The bill:

  • updates minimum auto insurance limits to $50,000 per person/ $100,000 per accident/$50,000 property damage,
  • eliminates the UIM hidden reduction (commonly referred to as the UIM liability credit),
  • fixes the three-year statute of limitations service issue for UM cases,
  • and requires medical providers to produce medical records within 60 days of request.

This law would represent a substantial step forward in ensuring that individuals in the state are adequately protected in the event of accidents. It serves as a significant affirmative legislative victory, demonstrating the positive impact that dedicated advocacy and collaboration can have on the lives of citizens across North Carolina.

Higher Limits Aligned With Today’s Costs

Since 1999, the minimum required automobile liability insurance limits in North Carolina remained stagnant at $30,000 per person/$60,000 per accident/$25,000 property damage. This meant that injured individuals often faced significant financial hardships when involved in wrecks with underinsured or uninsured motorists. The higher limits align more closely with the rising costs of medical care and vehicle repair in today’s world. This change would also guarantee that every insured driver would have at least $50,000 in uninsured coverage if they were hurt or killed by an uninsured driver. If it becomes law, changes would be effective Jan. 1, 2025, to give the Department of Insurance and the N.C. Rate Bureau time to fulfill their statutory rate-making duties.

Senate Bill 452 would also eliminate the Underinsured Motorist Insurance (UIM) hidden reduction for payments made by the liability insurer. Currently, UIM insurers can reduce benefits based on what the liability insurer has paid. Under a new law, UIM carriers would no longer be able to reduce their coverage for payments made by the liability insurer. This change would ensure that individuals who have responsibly purchased UIM coverage would receive the full benefits they purchased, regardless of any payments made by the liability insurer.

The new law also addresses a critical issue created by caselaw, which previously required that an underinsured insurer be served with a complaint before the three-year statute of limitations had expired. This requirement created unnecessary complications and burdens in the legal process. Senate Bill 452 rectifies this problem by stipulating that the complaint and summons must only filed before the three-year statute of limitations has expired and can be served later, in accordance with Rule 4 of the N.C. Rules of Civil Procedure, like all other civil matters in the state.