NC Insurance Rate Increase After Accident
After an at-fault NC accident, your insurance rate may increase under the Safe Driver Incentive Plan (SDIP). Learn how SDIP points affect your premium.
The Bottom Line
An at-fault accident in NC will increase your insurance by 45% to 80% for three years under the state-mandated Safe Driver Incentive Plan (SDIP). The exact amount depends on the accident's severity. Crucially, not-at-fault accidents should not increase your rates under North Carolina law.
How the NC Safe Driver Incentive Plan (SDIP) Works
North Carolina doesn't let insurance companies invent their own rules for rate hikes after a crash. Instead, the state requires all insurers to follow the Safe Driver Incentive Plan (SDIP). This plan dictates exactly how much your premium can increase after an at-fault accident or moving violation.
Established under
N.C. Gen. Stat. § 58-36-65
Here's the process:
- Your insurer identifies any new at-fault accidents or moving violations on your record for the last three years (the "experience period").
- They assign SDIP points for each incident according to a state-approved schedule.
- They add up your total points.
- They apply the corresponding percentage surcharge to your policy's base rate for the next three years.
It is important to know that SDIP points for insurance are separate from the points the DMV puts on your driver's license. An accident can give you both types of points, but they affect different things: SDIP points raise your insurance costs, while DMV points can lead to a license suspension.
SDIP Point System and Surcharge Percentages
The number of points you get depends on the severity of the at-fault accident.
Points for At-Fault Accidents
| Type of At-Fault Accident | SDIP Points |
|---|---|
| At-fault accident resulting in death | 4 points |
| At-fault accident with bodily injury OR property damage > $2,300 | 3 points |
| At-fault accident with property damage only, $2,300 or less | 2 points |
| At-fault accident with property damage only, $1,350 or less (with no moving violation conviction from the accident) | 1 point |
SDIP Surcharge Percentages by Total Points
This table, set by the NC Department of Insurance, shows how points translate into premium hikes.
| Total SDIP Points | Surcharge on Base Rate |
|---|---|
| 1 point | 30% |
| 2 points | 45% |
| 3 points | 60% |
| 4 points | 80% |
| 5 points | 105% |
| 6 points | 135% |
| 7 points | 170% |
| 8 points | 205% |
| 9 points | 245% |
| 10 points | 285% |
| 11 points | 340% |
| 12+ points | 340% |
Points from Moving Violations Stack
Points from traffic tickets are added to points from accidents. If you had a clean record and then caused an accident with an injury (3 points), your surcharge is 60%. But if you also got a ticket for running a red light (1 point) in the same incident, your total is 4 points, and your surcharge jumps to 80%.
What is an 'At-Fault' Accident for Insurance Purposes in NC?
This is the most important question. Under the SDIP, only at-fault accidents trigger points and surcharges.
An "at-fault" accident is one where your insurance company determines you were more than 50% responsible for the crash. This determination is crucial and is made independently by your insurer. It may not match the police report. The insurer reviews all evidence—the police report, driver and witness statements, photos, and traffic laws—to assign fault.
Will My Rates Go Up if the Accident Wasn't My Fault?
No. If the evidence clearly shows the other driver was 100% responsible for the accident, you are considered "not at fault." In this case, you should not receive any SDIP points, and your insurance rates should not increase because of the claim. The other driver's insurance is responsible for your damages, and they will be the one getting SDIP points.
Property Damage Thresholds that Trigger a Rate Increase
As shown in the table above, the amount of property damage is a key factor. The primary threshold set by the NC Department of Insurance is currently $2,300.
- If you are at-fault and the property damage exceeds $2,300, it's an automatic 3-point incident (unless there's also an injury or death).
- If the property damage is $2,300 or less, it's a 2-point incident.
This dollar threshold is reviewed periodically and can be adjusted by the state.
How to Dispute a Rate Increase
If you receive a notice that your premium is increasing due to an accident you believe was not your fault, you have the right to appeal.
Here is a step-by-step guide:
- Review the Surcharge Notice: Your insurer must send you a written notice explaining the surcharge, the incident it's based on, and your right to appeal.
- Contact Your Insurer: Call your agent or the claims department. Ask them to explain exactly why they determined you were at fault. Sometimes, a simple misunderstanding can be cleared up.
- Gather Your Evidence: Collect any evidence that proves you were not at fault. This includes the police report (if it's in your favor), photos or videos from the scene, and contact information for any witnesses.
- Request a Formal Review: Write a formal letter to your insurer requesting they reconsider their fault determination based on your evidence.
- File an Official Appeal: If the insurer refuses to remove the surcharge, you can appeal to the state. You must file a request for review with the North Carolina Rate Bureau within 60 days of receiving the surcharge notice. They will review the case and make a final decision.
What About Claims That Aren't Your Fault?
Not all claims lead to a rate hike. Besides not-at-fault accidents, other claim types are "neutral" and do not add SDIP points.
Comprehensive Claims
Comprehensive claims cover damage not caused by a collision. Filing one should not increase your rates in NC. Examples include:
- Hitting a deer or other animal
- Hail damage or a tree limb falling on your car
- Theft or vandalism
- Windshield cracks from rocks
- Flooding
You will still have to pay your comprehensive deductible, but there is no SDIP surcharge for these events because they are not related to your driving behavior.
Uninsured/Underinsured Motorist (UM/UIM) Claims
If you are hit by a driver with no insurance or not enough insurance, you will file a claim under your own Uninsured or Underinsured Motorist coverage. Because you are not at fault in this scenario, a UM/UIM claim should not result in SDIP points or a rate increase.
Is It Better to Pay Out-of-Pocket?
After a minor, clear-cut at-fault accident, you might wonder if you should just pay for the other party's damages yourself to avoid a claim.
Consider paying out of pocket only if ALL of these are true:
- The accident involves only minor property damage.
- No one was injured, not even slightly.
- The total repair cost is low (e.g., less than your deductible plus the 3-year cost of the surcharge).
- You get a signed release from the other party stating they accept your payment as final and will not sue or claim injuries later.
N.C. Gen. Stat. § 58-36-65
Establishes the Safe Driver Incentive Plan (SDIP) and requires it to be used by all auto insurers in North Carolina to apply surcharges for at-fault accidents and moving violations.
N.C. Gen. Stat. § 58-36-75
Details the assignment of insurance points for convictions of moving violations and for at-fault accidents, providing the legal basis for the surcharges outlined in the SDIP.
Frequently Asked Questions
Frequently Asked Questions
How many points is an at-fault accident in NC?
An at-fault accident resulting in death is 4 SDIP points. An accident involving any bodily injury OR property damage over $2,300 is 3 points. An accident with only property damage of $2,300 or less is 2 points. More points lead to a higher insurance surcharge.
How long do accident points stay on my NC insurance record?
SDIP points and their corresponding surcharges remain on your insurance policy for three years from the date the accident occurred. After three years with no new incidents, the points and surcharge are removed at your next policy renewal.
Will my rates go up if the accident wasn't my fault?
No. Under the North Carolina Safe Driver Incentive Plan (SDIP), only drivers who are determined to be at-fault for an accident receive insurance points and rate increases. If you are not at fault, your rates should not go up because of the accident.
Can my insurance drop me after one at-fault accident in NC?
It is possible, but not just for any accident. An insurer can cancel your policy mid-term only for specific reasons, like non-payment or fraud. However, they can choose not to renew your policy at the end of its term. A single major at-fault accident (like a DWI-related crash) or a series of smaller claims could lead to non-renewal.
What if the other driver was uninsured, will my rates go up?
No, using your Uninsured Motorist (UM) coverage should not increase your rates in North Carolina. UM claims are considered not-at-fault claims. You are using the coverage you paid for to protect yourself from a driver who broke the law by not having insurance.
Is it better to pay out-of-pocket to avoid an insurance rate increase?
For a very minor accident where damage is less than your deductible plus the total three-year cost of the rate increase, it can be cheaper to pay out-of-pocket. However, if anyone was injured or the damage is significant, you should always file a claim to protect yourself from liability.
How much will my insurance go up after an at-fault accident in NC?
It depends on the severity. A common at-fault accident with property damage over $2,300 or an injury (3 SDIP points) results in a 60% surcharge on your base premium. An accident resulting in a death (4 SDIP points) causes an 80% surcharge. These surcharges last for three years.
Does accident forgiveness work in NC?
Yes, some insurers in NC offer accident forgiveness as a policy add-on or loyalty reward. It typically prevents your rates from increasing after your first at-fault accident. However, it's not required by law, and the underlying SDIP points may still be on your record, affecting you if you switch companies.