Differences Between NC and SC on Insurance Coverage, Comparative Negligence, and Punitive Damages

Car owners and drivers must have liability insurance in both North Carolina and South Carolina in case they cause an accident. Car owners can also purchase other types of coverage to protect themselves if the responsible driver does not have insurance and if the owner or driver causes the accident.

Additionally, if you are in an accident, whether you contributed to the accident may be a factor in both states. We explain these issues in this article.

Mandatory insurance coverage in North Carolina and South Carolina

Effective July 1, 2025, in North Carolina, all vehicles that have a valid North Carolina registration must have the following liability insurance coverage (from a company licensed to do business in North Carolina) in the event the owner or driver is liable for an accident:

• Bodily injury for one person. $50,000.
• Bodily injury for two or more people. $100,000.
• Property damage. $50,000.

In addition, the covered vehicle should also have uninsured/underinsured coverage (UM/UIM) at the same minimum as the liability coverage minimums.

We recommend as much liability coverage as you can reasonably afford because the value of a victim’s car accident claim can be much more than the state minimums – especially if the victim has a serious injury.

The mandatory coverages in South Carolina are:

• Bodily injury for one person. $25,000.
• Bodily injury for two or more people. $50,000.
• Property damage. $25,000.

South Carolina also requires that car owners and drivers have UM/UIM coverage in the same minimum amount as the liability coverage.

Optional insurance coverages in North Carolina and South Carolina

Car owners should consider the following optional insurance coverages for their vehicles. Both North Carolina and South Carolina car owners should consider buying these types of coverages:

• Medpay insurance. This type of coverage pays for your medical bills regardless of fault – up to a preset amount.
• Collision coverage. This coverage pays for the damage to your car if there is an accident, regardless of fault.
• Comprehensive coverage. This coverage pays for the damage or value of your car if your car is stolen, vandalized, or suffers damage due to non-accident causes such as storms and other weather events.
• Gap insurance. This coverage pays for the difference between what you owe on your car and the value of your car – in the event of an accident.
• Other coverages. These insurance policies include rental reimbursement coverage and roadside assistance coverage.

Comparative negligence in North Carolina and South Carolina

North Carolina has a strict comparative negligence law. In North Carolina, if an accident victim (the plaintiff) is even one percent responsible for a car accident, the victim cannot receive any damages. Responsibility means that the negligence (of any party) is the proximate cause of the victim’s injuries.

There are some exceptions to the rule that may entitle a victim who is comparatively negligent to receive damages (medical bills, pain and suffering, loss of income, and property damage). These exceptions include the following:

• The defendant (the other driver) had the last clear chance to prevent the accident. An example is when the plaintiff is in a dangerous situation, such as a child runs into the plaintiff’s path, causing the plaintiff to swerve into the defendant’s lane of travel to avoid striking the child. The plaintiff should be able to recover damages if the defendant saw the child and the plaintiff swerving – and failed to move into another lane of travel or simply stop to prevent the collision.
• The defendant (the other driver) is grossly negligent. An example is when a driver who is driving under the influence of alcohol strikes a victim. Even though the victim may have contributed to the accident, the victim should be able to claim compensation for all their damages. Additionally, the victim may also be able to claim punitive damages.

South Carolina has a more forgiving comparative negligence law. In South Carolina, a plaintiff/victim can receive damages if their fault is less than or equal to the fault of the defendant/other driver. However, the damage award amount is reduced by the percentage of the plaintiff’s fault. For example, if a victim is 20% at fault and the damage claim is worth $100,000, the victim should receive $80,000.

Punitive damages in North Carolina and South Carolina

North Carolina law permits punitive damages to “punish a defendant for egregiously wrongful acts and to deter the defendant and others from committing similar wrongful acts.” To recover, a plaintiff must show that a defendant is:

• Liable for compensatory damages (such as medical bills, pain and suffering, lost income, and property damage); and
• The defendant’s conduct involved fraud, malice, or willful and wanton conduct.

Punitive damages do not include vicarious liability (such as when a parent is liable for the negligence of their teenager who causes an accident).

Willful or wanton conduct “means the conscious and intentional disregard of and indifference to the rights and safety of others, which the defendant knows or should know is reasonably likely to result in injury, damage, or other harm. “Willful or wanton conduct” means more than gross negligence.

Malice “means a sense of personal ill will toward the claimant that activated or incited the defendant to perform the act or undertake the conduct that harmed the claimant.

The amount of punitive damages is limited to the greater of:

• 3 times the amount of the compensatory damages
• $250,000

In South Carolina, punitive damages can be awarded if the other driver was grossly negligent, willful, wanton, or reckless, provided “such conduct was the proximate cause of the claimant’s noneconomic damages…”

South Carolina also caps punitive damages at the greater of:

• 3 times the amount of the compensatory damages
• $500,000

There are some cases where the cap increases to 4 times the compensatory damages or $2 million (whichever is greater) – such as when the defendant could be charged with a felony. There is no cap if the accident is due to a drunk driver, the defendant pled or was found guilty of a felony, or the harm was intentional.

Our Charlotte car accident lawyers have the skill and experience to handle all parts of any car accident claim, including insurance coverage, comparative negligence, and punitive damages. Contact Price, Petho & Associates to schedule a free consultation.