Insurance and Financial Responsibility Flashcards

Under North Carolina law, liability insurance used to register a vehicle must be issued by an insurance company that is:

Answer: Licensed to do business in North Carolina

North Carolina only accepts liability policies written by insurers licensed to operate in the state.

What happens if you let your North Carolina liability insurance lapse while your vehicle is still registered?

Answer: The DMV may revoke your license plate and charge a civil penalty

A coverage lapse on a registered vehicle triggers a civil penalty and possible 30-day plate revocation.

When the NC DMV mails you a notice that your insurance company reported a coverage termination, how many days do you have to respond?

Answer: 10 days

You must respond to a liability insurance termination notice within 10 days to avoid plate revocation.

Which scenario satisfies North Carolina's continuous liability insurance requirement?

Answer: Keeping the policy active the entire time the vehicle is registered, even when it is parked

NC requires continuous coverage for the entire registration period, regardless of whether the vehicle is driven.

A driver sells insurance-covered Car A and cancels the policy, but forgets that Car A's plate is still active with the DMV. What should the driver have done?

Answer: Surrendered the plate to the DMV before or when canceling the insurance

Turning in the plate before canceling coverage prevents a reported lapse and civil penalty.

In North Carolina, uninsured motorist coverage in a standard auto liability policy is:

Answer: Required as part of the policy

North Carolina requires uninsured motorist coverage to be included with liability policies.

Which document does a new North Carolina driver license applicant typically use to prove they have liability insurance?

Answer: Form DL-123 from their insurance provider

The DL-123 is the insurance certification form used when applying for a North Carolina license.