NC DMV Insurance and Financial Responsibility 2

Question 1

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

Accepted Answer

Licensed to do business in North Carolina

Answer

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

Question 2

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

Accepted Answer

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

Answer

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

Question 3

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

Accepted Answer

10 days

Answer

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

Question 4

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

Accepted Answer

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

Answer

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

Question 5

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?

Accepted Answer

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

Answer

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

(NC DMV) North Carolina Department of Motor Vehicle Practice Test

(NC DMV) North Carolina Department of Motor Vehicle Practice Test

NC DMV Insurance and Financial Responsibility 2