North Carolina Expanding Inexperienced Driver Surcharge

Young drivers in North Carolina are in for a big surprise this summer — and so are their parents. Starting July 1, a new state law is shaking up how long insurers can surcharge new drivers. Now, new drivers will be considered inexperienced for eight years, instead of just three. This means higher car insurance rates will likely stick around long after the nerves of being a new driver have faded and cost new drivers and their families more over time. 

North Carolina drivers already experienced a 35 percent rate increase from January 2023 to January 2025 for full coverage car insurance. With rising costs and uncertain economic conditions tied to car ownership, some families may start second-guessing whether it’s worth allowing their teen to get behind the wheel.  

What is changing for new drivers in North Carolina?

The inexperienced operator surcharge is an extra cost that car insurance companies add to insurance policies for newly licensed drivers in North Carolina. It’s based on the idea that drivers with little driving experience pose a higher risk on the road. Insurance companies offset this risk by charging more for auto insurance. 

Currently, North Carolina classifies an “inexperienced operator” as someone with less than three years of licensed driving experience. But that is about to change. The inexperienced operator surcharge will jump from three years to eight years effective this July, according to North Carolina car insurance laws.

The North Carolina General Statutes Chapter 58-36-65 outlines the updated law in detail, but there is still some confusion regarding how drivers can minimize the impact of this rate change. The law states that an inexperienced operator who has maintained a clean driving record for three years may be eligible for an inexperienced operator discount; however, details about the discount are not specified. 

We reached out to the North Carolina Department of Insurance (NCDOI) and the North Carolina Rate Bureau (NCRB) for clarification. While the NCRB did not reply, an analyst from the NCDOI confirmed that the wording regarding discounts is ambiguous. The NCRB would need to submit the inexperienced safe driving discount to the insurance commissioner for approval, but as of April, they have not. 

The analyst we spoke to also pointed out that each insurance company operates differently, and unless a law is enacted requiring insurance companies to offer this specific discount, there is no guarantee one will be available. 

North Carolina Insurance Commissioner Mike Causey says he’s “heard concerns and complaints from families with younger drivers about the surcharge going to eight years.”

Who’s affected and who isn’t?

Any driver licensed before July 1, 2025, will remain on the three-year inexperienced operator path. Drivers licensed after July 1 will be part of the new eight-year inexperienced operator route. Since this law focuses on driving experience instead of age, adults who get their license later in life or don’t have qualifying driving experience (i.e., those who took an extended break from driving or were licensed in another country) may also qualify as an inexperienced operator. 

What new drivers and their parents should pay special attention to is who is classified as a licensed driver. North Carolina uses a graduated licensing program for teens under 18. There are three levels. At the first level, teens receive a learner’s permit. They won’t get hit with the inexperienced driver fee, and their parents usually don’t have to pay more for their car insurance. But once a teen gets a limited or full license, that changes. They are then considered licensed drivers and will face the inexperienced driver fee, which means higher insurance rates.

Is the North Carolina inexperienced operator surcharge fair?

While no one wants to pay more for insurance, this inexperienced operator surcharge isn’t a punishment for new drivers — it’s a financial safeguard that reflects real-world crash data. According to the North Carolina Department of Transportation, drivers aged 20 to 29 are involved in more car crashes than any other age group. Compared to the next age category, 30- to 39-year-old drivers, those in their 20s are involved in 20 percent more car crashes.

North Carolina car crash statistics by age

Most insurance companies consider drivers under the age of 24 a “youthful operator” and charge higher insurance premiums during this period. Based on Bankrate’s analysis, national full coverage car insurance rates increase by 115 percent when a 16-year-old driver is added to their parents’ policy. In North Carolina, rates jump by 132 percent. 

While rates decrease as drivers gain experience, many are concerned that by extending the surcharge period to eight years, North Carolina drivers may have to pay disproportionately higher rates for longer.

When comparing rates for young drivers in North Carolina to the national average, drivers in North Carolina pay substantially less. Nationally, the average cost of full coverage car insurance for an 18-year-old with their own policy is a shocking $7,382 as of April 2025. In North Carolina, the same policy costs $4,307.

Bankrate’s True Cost of Auto Insurance report found that drivers in North Carolina spend 2.89 percent of their median household income on car insurance, compared to the national average of 3.39 percent. Commissioner Causey says this affordability is intentional. “[We’ve] worked hard to keep a stable and healthy insurance market,” he says, and he wants it to stay that way. But there are other influences at play.

How families can save money on their NC car insurance

Understandably, parents or new drivers will be hunting for more affordable car insurance, and there are several ways to approach this situation. For Chad Cook, a North Carolina resident and father to a teen driver, leaning into the rate increases is what works best for him. “I don’t think this would have changed our choice to let him drive early,” says Cook about his son, who started driving when he was 16.

For drivers and families facing high premiums, here are some of the best ways to save money on car insurance for young drivers:

• Have the “money talk” with your teen: Once your child has a license, your family’s insurance policy will become more expensive — oftentimes, significantly. Before heading to the DMV, talk to your teen about insurance costs, the impact accidents and speeding tickets can have on rates and what might happen if premiums become unaffordable.
• Ask about discounts: Most carriers offer discounts to young drivers for completing an additional driver training program or maintaining good grades. Keeping a GPA above 3.0 may be a good incentive to earn the privilege of driving. 
• Don’t buy teens their own car: Inexperienced drivers will increase your car insurance rate. However, the impact will be significantly less if the new driver is listed as an occasional driver and shares your car, than if they are a primary operator of their own vehicle. 
• Consider liability-only coverage: If your new driver does get their own car, consider purchasing a used vehicle that does not require full coverage insurance. Comprehensive and collision insurance (commonly called full coverage) tend to be the most expensive portions of a car insurance policy for youthful drivers. However, this doesn’t mean you should skimp on coverage. You may want to talk to your insurance agent about increasing your liability limits for better financial protection.