Insurance and Financial Responsibility Flashcards

A North Carolina officer stops you and asks for proof of insurance. Which of these is an acceptable way to show it?

Answer: A current insurance card or electronic proof from your insurer

A valid insurance card, paper or electronic, is accepted proof of financial responsibility.

You cancel your old policy and start a new one with a different company. To avoid a DMV lapse penalty, the new policy must:

Answer: Take effect with no gap in coverage after the old one ends

Even a short gap between policies counts as a lapse and can trigger penalties.

Which vehicle owner is NOT required to maintain North Carolina liability insurance?

Answer: An owner who has surrendered the plate and taken the vehicle off the road

Only vehicles with surrendered plates and no active registration are exempt from the coverage requirement.

The penalty for a third or subsequent insurance lapse on a North Carolina vehicle is:

Answer: $150

Civil penalties escalate from $50 for the first lapse to $100 for the second and $150 for the third or later.

A driver with several at-fault crashes cannot find a company willing to insure them. In North Carolina, this driver can obtain required coverage through:

Answer: The North Carolina Reinsurance Facility, a shared high-risk market

The North Carolina Reinsurance Facility ensures that high-risk drivers can still obtain required liability coverage.

If your insurer cancels your policy, who tells the NC DMV that your coverage ended?

Answer: The insurance company reports the termination electronically

North Carolina insurers must notify the DMV when a liability policy is terminated.

You receive a DMV insurance-lapse notice but your coverage never actually stopped. What is the best action?

Answer: Respond within the deadline with proof of continuous coverage from your insurer

Responding on time with proof of continuous coverage clears the record and prevents penalties.