For the Personal Lines exam you need the national Personal Auto Policy structure and the North Carolina rules layered on top—and North Carolina's twists are about who can recover and what you must buy, not a no-fault system. The state's defining trait is a strict pure contributory negligence rule, and its auto premiums are built from rates filed by the North Carolina Rate Bureau. This guide runs the policy fundamentals quickly, then makes North Carolina law the spine.

The national PAP in 60 seconds

The Personal Auto Policy (PAP) is the standard contract protecting individuals and families for the vehicles they own and drive. It is organized into lettered parts:

• Part A — Liability (bodily injury and property damage you are legally liable for, plus a duty to defend).
• Part B — Medical Payments.
• Part C — Uninsured/Underinsured Motorists.
• Part D — Coverage for Damage to Your Auto (Collision and Other Than Collision).
• Part E — Duties After an Accident.
• Part F — General Provisions.

An insured generally includes the named insured, the resident spouse, resident family members (including a child away at school), and anyone driving your covered auto with permission. Eligible vehicles are private passenger autos, pickups, and vans not used mainly for business. North Carolina keeps this national base and adds its fault rule, compulsory limits, and rate-filing structure.

North Carolina decides claims by contributory negligence

North Carolina is an at-fault (tort) state—there is no PIP / no-fault requirement—but the way fault is applied is what makes it special. The state uses pure contributory negligence:

• If the person bringing the claim is found even 1% responsible for the accident, they are generally barred from recovering anything from the other driver.
• North Carolina is one of just a few jurisdictions that still apply this harsh rule, usually grouped with Alabama, Maryland, Virginia, and Washington, D.C.
• A limited "last clear chance" exception can rescue a claim where the other driver had the final realistic chance to avoid the crash.

Why it matters to a client: in most states a partly-at-fault driver still recovers a reduced amount (comparative negligence); in North Carolina they may walk away with nothing. That elevates the importance of strong liability, UM, and UIM limits—a frequent Personal Lines talking point and test item.

What North Carolina requires you to carry

North Carolina is a compulsory insurance state: to register and operate a vehicle you must maintain minimum liability coverage. The headline change is that these minimums were increased in 2025 after staying flat for decades.

• Current minimum limits: 50/100/50 — $50,000 bodily injury per person, $100,000 bodily injury per accident, $50,000 property damage.
• Old minimum limits: 30/60/25.
• Hedge the date: the increase was first set for January 1, 2025 and then pushed to July 1, 2025, applying to new and renewed policies on or after the effective date. For a figure-only question, the answer is 50/100/50.

There is no PIP requirement—do not bring Florida-style no-fault thinking into a North Carolina question.

UM and UIM are mandatory protections

Because contributory negligence can erase a claim against another driver, North Carolina leans heavily on Uninsured/Underinsured Motorist coverage and requires it:

• Uninsured Motorist (UM) coverage is mandatory on every policy, at limits at least equal to the policy's liability limits (so a 50/100/50 policy carries UM at 50/100).
• Underinsured Motorist (UIM) is required when the insured buys liability above the statutory minimum; at exactly the minimum it may not be triggered.
• North Carolina recently improved how UIM pays (addressing the older "set-off" that used to reduce benefits), so injured insureds keep more of the coverage—confirm specifics, but know UIM was strengthened with the 2025 limit increase.

How high-risk drivers get covered: the Reinsurance Facility

North Carolina guarantees that virtually any eligible driver can buy auto insurance, but it does it differently from most states:

• Insurers generally cannot refuse to write an eligible applicant.
• An insurer that doesn't want to keep a high-risk policy may cede it to the North Carolina Reinsurance Facility, which reinsures the risk and shares the losses among all auto writers.
• Keep three NC bodies straight: the Reinsurance Facility (high-risk reinsurance), the Rate Bureau (files the rates), and the Guaranty Association (pays claims of insolvent insurers).

Physical-damage coverages and where rates come from

These mirror the national PAP, but lenders and weather drive purchasing:

• Collision — damage from impact or overturn, regardless of fault; carries a deductible.
• Other Than Collision (Comprehensive) — fire, theft, vandalism, glass, flood, hail, falling objects, and animal strikes. Remember the classic distinction: hitting a deer is comprehensive, not collision.
• Medical Payments, rental reimbursement, and towing are optional add-ons.
• Your premium is built from rates developed and filed by the North Carolina Rate Bureau and reviewed/approved by the Commissioner—so if a question asks who files auto rates, the answer is the Rate Bureau, not the NCDOI.

Key North Carolina numbers to memorize

Common exam traps

• Saying North Carolina uses comparative negligence. It is pure contributory negligence—1% fault can bar the entire claim.
• Treating it as no-fault. There is no PIP; North Carolina is tort/at-fault.
• Quoting 30/60/25. The current minimum is 50/100/50 after the 2025 increase.
• Making UM/UIM optional. UM is mandatory; UIM is mandatory once liability exceeds the minimum.
• Confusing the three NC bodies. Facility = high-risk reinsurance; Rate Bureau = rate filings; Guaranty Association = insolvency.
• Assuming the DOI sets premiums. Rates are filed by the Rate Bureau and approved by the Commissioner.
• Calling a deer strike collision. It is Other Than Collision (comprehensive).

Quick recap

For the North Carolina Personal Lines exam, start from the national PAP (Parts A–F), then layer on the state rules. North Carolina is an at-fault state with no PIP, but it applies the strict pure contributory negligence doctrine, so a claimant who is even 1% at fault usually recovers nothing—one of only a few jurisdictions (with AL, MD, VA, DC) still doing this, which is why UM/UIM matters so much. It is compulsory, with minimum limits raised to 50/100/50 in 2025 (from 30/60/25; effective date moved to July 1, 2025), mandatory UM, and UIM above the minimum. High-risk drivers are absorbed by the North Carolina Reinsurance Facility, and premiums come from rates filed by the North Carolina Rate Bureau and approved by the Commissioner. Lock in "1% bars recovery, 50/100/50, Rate Bureau files the rate," and the toughest North Carolina auto items become easy points.