Guest Author
By Anuj Kasera
Welcome to the Carolinas! Whether you are a new immigrant, an international student or a visitor and are planning to drive, proof of insurance is essential to get a driver’s license (DL). Each state has its own insurance requirements and additional documents, like proof of legal presence, will be required during the licensing process. In this article, we are going to talk about insurance requirements for immigrant drivers who have never been licensed before in the US.
Note that if you are a temporary visitor in the US, it is legal to drive a car in the Carolinas with your Indian license. But if you are here on student/work visa or Green Card, it is expected that you must apply for the US license within a short period of arrival. You may borrow your friend’s car, rent from a car rental company or buy from a dealership or private owner – but you will need to have your own liability insurance to get a license.
Proof of liability insurance is required to get a DL, regardless of whether you own a vehicle or not. If you do not own a car, you will need to obtain a “non-owner’s liability insurance” policy. Each family member will need to have their own liability insurance. Most people first get their DL and then purchase a car. After you purchase the car, all family members can cancel their individual policies as they will be covered by the single auto policy that you will purchase to register the car.
We often get the question on whether new immigrants can borrow their friend or relative’s car. The general rule is that Insurance follows the car which means that anyone driving the car with the owner’s permission is covered. So, if your friend/relative has given you permission to drive their car and you have a valid license from a foreign country, you can start driving at least temporarily.
If your friend or family member has allowed you to operate their car on an occasional basis, their insurance will cover you as well. But if you are staying with them or plan to regularly use their car, the owner will need to add you to their policy.
The owner of the car should understand the risk of allowing you to drive their car. If you are involved in an accident, it may show up on the owner’s records as well and push up their premium. Both you and your friend/relative should discuss the implication of adding you to their policy with the insurance agent or even letting you borrow the car.
If you are planning to rent a car, the rental company will need to see at least state minimum liability insurance or the non-owner’s liability insurance. The rental company may also require full coverage for the car. Rental companies can offer the necessary insurance, though it may be at a higher cost. Most rental companies will rent you the car based on your foreign license, but they absolutely will require proof of insurance coverage.
If you decide to buy a car, you will need to ensure that you have the proper insurance coverage before you sign the papers and start driving. If you are financing the car, most likely the financing company will require you to show proof of insurance which will cover theft or damage to the car. If you do not have a lien on the car (example – purchased with cash), then only liability insurance is mandatory. You may choose to cover your car depending on your financial situation, value of the car and your risk capability.
Now that you have decided whether you are going to borrow, rent or buy, it is time to get the NC driving license. In North Carolina, you will need to take proof of liability insurance (DL123 form) to the DMV. This is a certificate of insurance which serves as proof to the NC DMV that you have the minimum liability insurance coverage required. Your insurance company should be able to issue this form. In South Carolina, DL123 is not required, and you can just show your policy as proof of insurance when you go to the DMV.
We will discuss the various coverages provided by the policy in detail in another article but here is brief overview of two most common coverages:
Liability: Both NC and SC require this coverage to issue you a license. This covers damage to other parties if you are responsible for the accident. There are two parts to this coverage: 1) Bodily Injury which covers medical expenses and lost wages if you injure someone and 2) Property Damage which covers the other party’s property. This coverage does not cover you or anyone in the car.
Coverages differ by state. NC minimum limits are $50,000 for bodily injury person, $100,000 for bodily insurance per accident and $50,000 for property damage per accident. SC minimum limits are $25,000, $50,000 and $25,000 respectively.
Comprehensive and Collision: This is not mandatory although your financing company may require it to protect itself. It covers damage done to your vehicle in an accident, theft, fire etc. A deductible usually applies before the policy will pay you.
In our next article, we will discuss in detail the different coverage provided by the auto insurance policy.
Anuj Kasera is a long term resident of Charlotte, NC and owns an insurance agency, focusing mostly on home, auto and business insurance. He can be reached at info@monains.com.
