Tom's Blog
If You Receive Notice That Your N.C. Auto Liability Insurance is Ceded, Will You Know What It Means?
If you own or operate a vehicle in North Carolina, you are required to carry auto liability insurance. While this may sound straightforward, it can be more challenging than expected. A poor driving record with multiple accidents or violations can create obstacles to obtaining or maintaining N.C. auto insurance. A tarnished driving record may lead an insurer to cede your auto liability insurance. But if you receive notice that your N.C. auto liability insurance is ceded, will you know what it means?
In most cases, auto insurance coverage cannot be denied. However, if your insurer determines that you pose a high risk, they can turn your policy over to the North Carolina Reinsurance Facility (NCRF). *Exclusions may apply, so contact your local N.C. independent insurance agent if you have questions.
The NCRF and What It May Mean for You
The North Carolina Reinsurance Facility, established over 45 years ago, provides auto liability insurance to drivers deemed “high risk,” sharing this risk among all its member insurers instead of placing it entirely on one company.
If your driving record is poor, an insurance company may decide to “cede” your policy to the NCRF. However, you aren’t required to stay in the Facility permanently. You can choose to improve your driving record over the next two years and aim to return to the voluntary market, where rates are typically more affordable. Remember that insurance premiums for high-risk drivers in the NCRF are often about 35% higher than those in the voluntary market.
The NCRF focuses on providing auto liability insurance and generally doesn’t include comprehensive or collision coverage for high-risk drivers. However, some N.C. insurers specialize in non-standard insurance for drivers needing or wanting these coverages.
Paramount Insurance Agency Can Answer Your Questions
If you receive notice that your N.C. auto liability insurance has been ceded, contact us at 336-869-3335 with any questions. We are a North Carolina independent insurance agency that understands how some companies are more likely to cede auto liability policies. We can work with you to explore coverage options and rates that might suit you better with another carrier. With access to top-rated insurance carriers, we can recommend a plan of action tailored to your current N.C. auto insurance needs as a high-risk driver.
