CHAPTER 20.
Motor Vehicles.
Article 9A.
Motor Vehicle Safety and Financial Responsibility Act of 1953.
§ 20-279.1. Definitions.
The following words and phrases, when used in this
Article, shall, for the purposes of this Article, have the
meanings respectively ascribed to them in this section, except
in those instances where the context clearly indicates a
different meaning:
(1) Repealed by Session Laws 1973, c. 1330, s. 39.
(2) Repealed by Session Laws 1991, c. 726, s. 20.
(3) "Judgment": Any judgment which shall have become
final by expiration without appeal of the time
within which an appeal might have been perfected,
or by final affirmation on appeal, rendered by a
court of competent jurisdiction of any state or of
the United States, upon a cause of action arising
out of the ownership, maintenance or use of any
motor vehicle, for damages, including damages for
care and loss of services, because of bodily injury
to or death of any person, or for damages because
of injury to or destruction of property, including
the loss of use thereof, or upon a cause of action
on an agreement of settlement for such damages.
(4) to (6) Repealed by Session Laws 1973, c. 1330, s.
39.
(7) "Nonresident's operating privilege": The privilege
conferred upon a nonresident by the laws of this
State pertaining to the operation by him of a motor
vehicle in this State.
(8) to (10) Repealed by Session Laws 1973, c. 1330, s.
39.
(11) "Proof of financial responsibility": Proof of
ability to respond in damages for liability, on
account of accidents occurring subsequent to the
effective date of said proof, arising out of the
ownership, maintenance or use of a motor vehicle,
in the amount of thirty thousand dollars ($30,000)
because of bodily injury to or death of one person
in any one accident, and, subject to said limit for
one person, in the amount of sixty thousand dollars
($60,000) because of bodily injury to or death of
two or more persons in any one accident, and in the
amount of twenty-five thousand dollars ($25,000)
because of injury to or destruction of property of
others in any one accident. Nothing contained
herein shall prevent an insurer and an insured from
entering into a contract, not affecting third
parties, providing for a deductible as to property
damage at a rate approved by the Commissioner of
Insurance.
(12) Repealed by Session Laws 1973, c. 1330, s. 39.
(1953, c. 1300, s. 1; 1955, c. 1152, s. 3; c. 1355;
1967, c. 277, s. 1; 1971, c. 1205, s. 1; 1973, c.
745, s. 1; c. 1330, s. 39; 1979, c. 832, s. 1;
1991, c. 469, s. 1; c. 726, s. 20; 1999-228, s. 1.)
§ 20-279.2. Commissioner to administer Article; appeal to
court.
(a)The Commissioner shall administer and enforce the
provisions of this Article and may make rules and regulations
necessary for its administration and shall provide for hearings
upon request of persons aggrieved by orders or acts of the
Commissioner under the provisions of this Article.
(b) Any person aggrieved by an order or act of the
Commissioner requiring a suspension or revocation of his license
under the provisions of this Article, or requiring the posting
of security as provided in this Article, or requiring the
furnishing of proof of financial responsibility, may file a
petition in the superior court of the county in which the
petitioner resides for a review, and the commencement of such a
proceeding shall suspend the order or act of the Commissioner
pending the final determination of the review. A copy of such
petition shall be served upon the Commissioner, and the
Commissioner shall have 20 days after such service in which to
file answer. The appeal shall be heard in said county by the
judge holding court in said county or by the resident judge. At
the hearing upon the petition the judge shall sit without the
intervention of a jury and shall receive such evidence as shall
be deemed by the judge to be relevant and proper. Except as
otherwise provided in this section, upon the filing of the
petition herein provided for, the procedure shall be the same as
in civil actions.
The matter shall be heard de novo and the judge shall enter
his order affirming the act or order of the Commissioner, or
modifying same, including the amount of bond or security to be
given by the petitioner. If the court is of the opinion that the
petitioner was probably not guilty of negligence or that the
negligence of the other party was probably the sole proximate
cause of the collision, the judge shall reverse the act or order
of the Commissioner. Either party may appeal from such order to
the Supreme Court in the same manner as in other appeals from
the superior court and the appeal shall have the effect of
further staying the act or order of the Commissioner requiring a
suspension or revocation of the petitioner's license.
No act, or order given or rendered in any proceeding
hereunder shall be admitted or used in any other civil or
criminal action. (1953, c. 1300, s. 2.)
§ 20-279.3. Commissioner to furnish operating record.
The Commissioner shall upon request furnish any person a
certified abstract of the operating record of any person
required to comply with the provisions of this Article, which
abstract shall also fully designate the motor vehicle, if any,
registered in the name of such person, and if there shall be no
record of any conviction of such person of violating any law
relating to the operation of a motor vehicle or of any injury or
damage caused by such person, the Commissioner shall so certify.
(1953, c. 1300, s. 3.)
§ 20-279.4: Repealed by Session Laws 1995, c. 191, s. 4.
§ 20-279.5. Security required unless evidence of insurance;
when security determined; suspension; exceptions.
(a)When the Division receives a report of a reportable
accident under G.S. 20-166.1, the Commissioner must determine
whether the owner or driver of a vehicle involved in the
accident must file security under this Article and, if so, the
amount of security the owner or driver must file. The
Commissioner must make this determination at the end of 20 days
after receiving the report.
(b) The Commissioner shall, within 60 days after the receipt
of such report of a motor vehicle accident, suspend the license
of each operator and each owner of a motor vehicle in any manner
involved in such accident, and if such operator or owner is a
nonresident the privilege of operating a motor vehicle within
this State, unless such operator or owner, or both, shall
deposit security in the sum so determined by the Commissioner;
provided, notice of such suspension shall be sent by the
Commissioner to such operator and owner not less than 10 days
prior to the effective date of such suspension and shall state
the amount required as security; provided further, the
provisions of this Article requiring the deposit of security and
the suspension of license for failure to deposit security shall
not apply to an operator or owner who would otherwise be
required to deposit security in an amount not in excess of one
hundred dollars ($100.00). Where erroneous information is given
the Commissioner with respect to the matters set forth in
subdivisions (1), (2) or (3) of subsection (c) of this section
or with respect to the ownership or operation of the vehicle,
the extent of damage and injuries, or any other matters which
would have affected the Commissioner's action had the
information been previously submitted, he shall take appropriate
action as hereinbefore provided, within 60 days after receipt by
him of correct information with respect to said matters. The
Commissioner, upon request and in his discretion, may postpone
the effective date of the suspension provided in this section by
15 days if, in his opinion, such extension would aid in
accomplishing settlements of claims by persons involved in
accidents.
(c) This section shall not apply under the conditions stated
in G.S. 20-279.6 nor:
(1) To such operator or owner if such owner had in
effect at the time of such accident an automobile
liability policy with respect to the motor vehicle
involved in such accident;
(2) To such operator, if not the owner of such motor
vehicle, if there was in effect at the time of such
accident a motor vehicle liability policy or bond
with respect to his operation of motor vehicles not
owned by him;
(3) To such operator or owner if the liability of such
operator or owner for damages resulting from such
accident is, in the judgment of the Commissioner,
covered by any other form of liability insurance
policy or bond or sinking fund or group assumption
of liability;
(4) To any person qualifying as a self-insurer, nor to
any operator for a self-insurer if, in the opinion
of the Commissioner from the information furnished
him, the operator at the time of the accident was
probably operating the vehicle in the course of the
operator's employment as an employee or officer of
the self-insurer; nor
(5) To any employee of the United States government
while operating a vehicle in its service and while
acting within the scope of his employment, such
operations being fully protected by the Federal
Tort Claims Act of 1946, which affords ample
security to all persons sustaining personal
injuries or property damage through the negligence
of such federal employee.
No such policy or bond shall be effective under this section
unless issued by an insurance company or surety company
authorized to do business in this State, except that if such
motor vehicle was not registered in this State, or was a motor
vehicle which was registered elsewhere than in this State at the
effective date of the policy or bond, or the most recent renewal
thereof, or if such operator not an owner was a nonresident of
this State, such policy or bond shall not be effective under
this section unless the insurance company or surety company if
not authorized to do business in this State shall execute a
power of attorney authorizing the Commissioner to accept service
on its behalf of notice or process in any action upon such
policy, or bond arising out of such accident, and unless said
insurance company or surety company, if not authorized to do
business in this State, is authorized to do business in the
state or other jurisdiction where the motor vehicle is
registered or, if such policy or bond is filed on behalf of an
operator not an owner who was a nonresident of this State,
unless said insurance company or surety company, if not
authorized to do business in this State, is authorized to do
business in the state or other jurisdiction of residence of such
operator; provided, however, every such policy or bond is
subject, if the accident has resulted in bodily injury or death,
to a limit, exclusive of interest and cost, of not less than
thirty thousand dollars ($30,000) because of bodily injury to or
death of one person in any one accident and, subject to said
limit for one person, to a limit of not less than sixty thousand
dollars ($60,000) because of bodily injury to or death of two or
more persons in any one accident, and, if the accident has
resulted in injury to or destruction of property, to a limit of
not less than twenty-five thousand dollars ($25,000) because of
injury to or destruction of property of others in any one
accident. (1953, c. 1300, s. 5; 1955, cc. 138, 854; c. 855, s.
1; c. 1152, ss. 4-8; c. 1355; 1967, c. 277, s. 2; 1971, c. 763,
s. 3; 1973, c. 745, s. 2; 1979, c. 832, s. 2; 1983, c. 691, s.
2; 1991, c. 469, s. 2; 1991 (Reg. Sess., 1992), c. 837, s. 10;
1995, c. 191, s. 5; 1999-228, s. 2.)
§ 20-279.6. Further exceptions to requirement of security.
The requirements as to security and suspension in G.S.
20- 279.5 shall not apply:
(1) To the operator or the owner of a motor vehicle
involved in an accident wherein no injury or damage
was caused to the person or property of anyone
other than such operator or owner;
(2) To the operator or the owner of a motor vehicle
legally parked at the time of the accident;
(3) To the owner of a motor vehicle if at the time of
the accident the vehicle was being operated without
his permission, express or implied, or was parked
by a person who had been operating such motor
vehicle without such permission;
(4) If, prior to the date that the Commissioner would
otherwise suspend the license or the nonresident's
operating privilege under G.S. 20-279.5, there
shall be filed with the Commissioner evidence
satisfactory to him that the person who would
otherwise have to file security has been released
from liability or been finally adjudicated not to
be liable or has executed a duly acknowledged
written agreement providing for the payment of an
agreed amount, in installments or otherwise, with
respect to all claims for injuries or damages
resulting from the accident;
(5) If, prior to the date that the Commissioner would
otherwise suspend the license or the nonresident's
operating privilege under G.S. 20-279.5, there
shall be filed with the Commissioner evidence
satisfactory to him that the person who would
otherwise be required to file security has in any
manner settled the claims of the other persons
involved in the accident and if the Commissioner
determines that, considering the circumstances of
the accident and the settlement, the purposes of
this Article and of protection of operators and
owners of other motor vehicles are best
accomplished by not requiring the posting of
security or the suspension of the license. For the
purpose of administering this subdivision, the
Commissioner may consider a settlement made by an
insurance company as the equivalent of a settlement
made directly by the insured; nor
(6) If, prior to the date that the Commissioner would
otherwise suspend the license or the nonresident's
operating privilege under G.S. 20-279.5, there
shall be filed with the Commissioner evidence
satisfactory to him that another person involved in
the accident has been convicted by a court of
competent jurisdiction of a crime involving the
operation of a motor vehicle at the time of the
accident, and if the Commissioner in his discretion
determines, after considering the circumstances of
the accident or the nature and the circumstances of
the crime, that the purpose of this Article and of
protection of operators and owners of other motor
vehicles are best accomplished by not requiring the
posting of security or the suspension of the
license. (1953, c. 1300, s. 6; 1955, c. 1152, ss.
9, 10.)
§ 20-279.6A. Minors.
In determining whether or not any of the exceptions set
forth in G.S. 20-279.6 have been satisfied, in the case of
accidents involving minors, the Commissioner may accept, for the
purpose of this Article only, as valid releases on account of
claims for injuries to minors or damage to the property of
minors releases which have been executed by the parent of the
minor having custody of the minor or by the guardian of the
minor if there be one. In the case of an emancipated minor, the
Commissioner may accept a release signed by or a settlement
agreed upon by the minor without the approval of the parents of
the minor. If in the opinion of the Commissioner the
circumstances of the accident, the nature and extent of the
injuries or damage, or any other circumstances make it advisable
for the best protection of the interest of the minor, the
Commissioner may decline to accept such releases or settlements
and may require the approval of the superior court. (1955, c.
1152, s. 11.)
§ 20-279.7. Duration of suspension.
The license and nonresident's operating privilege
suspended as provided in G.S. 20-279.5 shall remain so suspended
and shall not be renewed nor shall any such license be issued to
such person until:
(1) Such person shall deposit or there shall be
deposited on his behalf the security required under
G.S. 20-279.5;
(2) One year shall have elapsed following the date of
such suspension and evidence satisfactory to the
Commissioner has been filed with him that during
such period no action for damages arising out of
the accident has been instituted; or
(3) Evidence satisfactory to the Commissioner has been
filed with him of a release from liability, or a
final adjudication of nonliability, or a duly
acknowledged written agreement, in accordance with
subdivision (4) of G.S. 20-279.6 or a settlement
accepted by the Commissioner as provided in
subdivision (5) of G.S. 20-279.6, or a conviction
accepted by the Commissioner as provided in
subdivision (6) of G.S. 20- 279.6; provided, if
there is a default in the payment of any
installment or sum under a duly acknowledged
written agreement, the Commissioner shall, upon
notice of the default, immediately suspend the
license or nonresident's operating privilege of the
defaulting person and may not restore it until:
a. That person deposits and thereafter maintains
security as required under G.S. 20-279.5 in an
amount determined by the Commissioner; or
b. That person files evidence satisfactory to the
Commissioner of a new duly acknowledged
written agreement or a settlement. (1953, c.
1300, s. 7; 1955, c. 1152, s. 12; 1983, c.
610, s. 1.)
§ 20-279.7A. Forms to carry statement concerning perjury.
A person who makes a false affidavit or falsely sworn or
affirmed statement concerning information required to be
submitted under this Article commits a Class I felony. The
Division shall include a statement of this offense on a form
that it provides under this Article and that must be completed
under oath. (1983, c. 610, s. 3; 1993 (Reg. Sess., 1994), c.
761, s. 26.)
§ 20-279.8. Application to nonresidents, unlicensed drivers,
unregistered motor vehicles and accidents in other
states.
(a)In case the operator or the owner of a motor vehicle
involved in an accident within this State has no license, or is
a nonresident, he shall not be allowed a license until he has
complied with the requirements of this Article to the same
extent that it would be necessary if, at the time of the
accident, he had held a license.
(b) When a nonresident's operating privilege is suspended
pursuant to G.S. 20-279.5 or 20-279.7, the Commissioner shall
transmit a certified copy of the record of such action to the
official in charge of the issuance of licenses in the state in
which such nonresident resides, if the law of such other state
provides for action in relation thereto similar to that provided
for in subsection (c) of this section.
(c) Upon receipt of such certification that the operating
privilege of a resident of this State has been suspended or
revoked in any such other state pursuant to a law providing for
its suspension or revocation for failure to deposit security for
the payment of judgments arising out of a motor vehicle
accident, under circumstances which would require the
Commissioner to suspend a nonresident's operating privilege had
the accident occurred in this State the Commissioner shall
suspend the license of such resident. Such suspension shall
continue until such resident furnishes evidence of his
compliance with the law of such other state relating to the
deposit of such security. (1953, c. 1300, s. 8.)
§ 20-279.9. Form and amount of security.
The security required under this Article shall be in
such form and in such amount as the Commissioner may require but
in no case in excess of the limits specified in G.S. 20-279.5 in
reference to the acceptable limits of a policy or bond. The
person depositing security shall specify in writing the person
or persons on whose behalf the deposit is made and, at any time
while such deposit is in the custody of the Commissioner or
State Treasurer, the person depositing it may, in writing, amend
the specification of the person or persons on whose behalf the
deposit is made to include an additional person or persons;
provided, however, that a single deposit of security shall be
applicable only on behalf of persons required to furnish
security because of the same accident.
The Commissioner may reduce the amount of security ordered
in any case if, in his judgment, the amount ordered is
excessive. In case the security originally ordered has been
deposited the excess deposited over the reduced amount ordered
shall be returned to the depositor or his personal
representative forthwith, notwithstanding the provisions of G.S.
20-279.10. (1953, c. 1300, s. 9.)
§ 20-279.10. Custody, disposition and return of security;
escheat.
(a)Security deposited in compliance with the requirements
of this Article shall be placed by the Commissioner in the
custody of the State Treasurer and shall be applicable only to
the payment of a judgment or judgments rendered against the
person or persons on whose behalf the deposit was made, for
damages arising out of the accident in question in an action at
law, begun not later than one year after the date of such
accident, or within one year after the date of deposit of any
security under subdivision (3) of G.S. 20-279.7, or to the
payment in settlement, agreed to by the depositor, of a claim or
claims arising out of such accident. Such deposit or any balance
thereof shall be returned to the depositor or his personal
representative when evidence satisfactory to the Commissioner
has been filed with him that there has been a release from
liability, or a final adjudication of nonliability, or a duly
acknowledged agreement, in accordance with subdivision (4) of
G.S. 20-279.6, or a settlement accepted by the Commissioner as
provided in subdivision (5) of G.S. 20- 279.6, or a conviction
accepted by the Commissioner as provided in subdivision (6) of
G.S. 20-279.6, or whenever, after the expiration of one year
from the date of the accident, or from the date of deposit of
any security under subdivision (3) of G.S. 20-279.7, whichever
is later, the Commissioner shall be given reasonable evidence
that there is no such action pending and no judgment rendered in
such action left unpaid.
(b) One year from the deposit of any security under the terms
of this Article, the Commissioner shall notify the depositor
thereof by registered mail addressed to his last known address
that the depositor is entitled to a refund of the security upon
giving reasonable evidence that no action at law for damages
arising out of the accident in question is pending or that no
judgment rendered in any such action remains unpaid. If, at the
end of three years from the date of deposit, no claim therefor
has been received, the Division shall notify the depositor
thereof by registered mail and shall cause a notice to be posted
at the courthouse door of the county in which is located the
last known address of the depositor for a period of 60 days.
Such notice shall contain the name of the depositor, his last
known address, the date, amount and nature of the deposit, and
shall state the conditions under which the deposit will be
refunded. If, at the end of two years from the date of posting
of such notice, no claim for the deposit has been received, the
Commissioner shall certify such fact together with the facts of
notice to the State Treasurer. These deposits shall be turned
over to the Escheat Fund of the Department of State Treasurer.
(1953, c. 1300, s. 10; 1955, c. 1152, s. 13; 1967, c. 1227;
1975, c. 716, s. 5; 1981, c. 531, s. 16.)
§ 20-279.11. Matters not to be evidence in civil suits.
Neither the information on financial responsibility
contained in an accident report, the action taken by the
Commissioner pursuant to this Article, the findings, if any, of
the Commissioner upon which the action is based, or the security
filed as provided in this Article shall be referred to in any
way, nor be any evidence of the negligence or due care of either
party, at the trial of any action at law to recover damages.
(1953, c. 1300, s. 11; 1995, c. 191, s. 6.)
§ 20-279.12. Courts to report nonpayment of judgments.
Whenever any person fails within 60 days to satisfy any
judgment, upon the written request of the judgment creditor or
his attorney it shall be the duty of the clerk of the court, or
of the judge of a court which has no clerk, in which any such
judgment is rendered within this State, to forward to the
Commissioner immediately after the expiration of said 60 days, a
certified copy of such judgment.
If the defendant named in any certified copy of a judgment
reported to the Commissioner is a nonresident, the Commissioner
shall transmit a certified copy of the judgment to the official
in charge of the issuance of licenses and registration
certificates of the state of which the defendant is a resident.
(1953, c. 1300, s. 12.)
§ 20-279.13. Suspension for nonpayment of judgment;
exceptions.
(a)The Commissioner, upon the receipt of a certified copy
of a judgment, which has remained unsatisfied for a period of 60
days, shall forthwith suspend the license and any nonresident's
operating privilege of any person against whom such judgment was
rendered, except as hereinafter otherwise provided in this
section and in G.S. 20-279.16.
(b) The Commissioner shall not, however, revoke or suspend
the license of an owner or driver if the insurance carried by
him was in a company which was authorized to transact business
in this State and which subsequent to an accident involving the
owner or operator and prior to settlement of the claim therefor
went into liquidation, so that the owner or driver is thereby
unable to satisfy the judgment arising out of the accident.
(c) If the judgment creditor consents in writing, in such
form as the Commissioner may prescribe, that the judgment
debtor be allowed license or nonresident's operating privilege,
the same may be allowed by the Commissioner, in his discretion,
for six months from the date of such consent and thereafter
until such consent is revoked in writing notwithstanding default
in the payment of such judgment, or of any installments thereof
prescribed in G.S. 20-279.16. (1953, c. 1300, s. 13; 1965, c.
926, s. 1; 1969, c. 186, s. 4; 1979, c. 667, s. 37.)
§ 20-279.14. Suspension to continue until judgments
satisfied.
Such license and nonresident's operating privilege shall
remain so suspended and shall not be renewed, nor shall any such
license be thereafter issued in the name of such person,
including any such person not previously licensed, unless and
until every such judgment:
(1) Is stayed, or
(2) Is satisfied in full, or
(3) Is subject to the exemptions stated in G.S. 20-
279.13 or G.S. 20-279.16, or
(4) Is barred from enforcement by the statute of
limitations pursuant to G.S. 1-47,
(5) Is discharged in bankruptcy. (1953, c. 1300, s. 14;
1969, c. 186, s. 5; 1975, c. 301.)
§ 20-279.15. Payment sufficient to satisfy requirements.
In addition to other methods of satisfaction provided by
law, judgments herein referred to shall, for the purpose of this
Article, be deemed satisfied:
(1) When thirty thousand dollars ($30,000) has been
credited upon any judgment or judgments rendered in
excess of that amount because of bodily injury to
or death of one person as the result of any one
accident; or
(2) When, subject to such limit of thirty thousand
dollars ($30,000) because of bodily injury to or
death of one person, the sum of sixty thousand
dollars ($60,000) has been credited upon any
judgment or judgments rendered in excess of that
amount because of bodily injury to or death of two
or more persons as the result of any one accident;
or
(3) When twenty-five thousand dollars ($25,000) has
been credited upon any judgment or judgments
rendered in excess of that amount because of injury
to or destruction of property of others as a result
of any one accident;
Provided, however, payments made in settlement of any claims
because of bodily injury, death or property damage arising from
a motor vehicle accident shall be credited in reduction of the
amounts provided for in this section. (1953, c. 1300, s. 15;
1963, c. 1238; 1967, c. 277, s. 3; 1973, c. 745, s. 3; c. 889;
1979, c. 832, ss. 3-5; 1991, c. 469, s. 3; 1991 (Reg. Sess.,
1992), c. 837, s. 10; 1999-228, s. 3.)
§ 20-279.16. Installment payment of judgments; default.
(a)A judgment debtor upon due notice to the judgment
creditor may apply to the court in which such judgment was
rendered for the privilege of paying such judgment in
installments and the court, in its discretion and without
prejudice to any other legal remedies which the judgment
creditor may have, may so order and fix the amounts and times of
payment of the installments.
(b) The Commissioner shall not suspend a license or a
nonresident's operating privilege, and shall restore any license
or nonresident's operating privilege suspended following
nonpayment of a judgment, when the judgment debtor obtains such
an order permitting the payment of such judgment in
installments, and while the payment of any said installment is
not in default.
(c) In the event the judgment debtor fails to pay any
installment as specified by such order, then upon notice of
such default, the Commissioner shall forthwith suspend the
license or nonresident's operating privilege of the judgment
debtor until such judgment is satisfied, as provided in this
Article. (1953, c. 1300, s. 16; 1969, c. 186, s. 6.)
§ 20-279.17. Repealed by Session Laws 1967, c. 866.
§ 20-279.18. Alternate methods of giving proof.
Proof of financial responsibility when required under
this Article with respect to a motor vehicle or with respect to
a person who is not the owner of a motor vehicle may be given by
filing:
(1) A certificate of insurance as provided in G.S. 20-
279.19 or 20- 279.20; or
(2) A bond as provided in G.S. 20-279.24; or
(3) A certificate of deposit of money or securities as
provided in G.S. 20-279.25; or
(4) A certificate of self-insurance, as provided in
G.S. 20- 279.33, supplemented by an agreement by
the self-insurer that, with respect to accidents
occurring while the certificate is in force, he
will pay the same judgments and in the same amounts
that an insurer would have been obligated to pay
under an owner's motor vehicle liability policy if
it had issued such a policy to said self-insurer.
(1953, c. 1300, s. 18.)
§ 20-279.19. Certificate of insurance as proof.
Proof of financial responsibility may be furnished by
filing with the Commissioner the written certificate of any
insurance carrier duly authorized to do business in this State
certifying that there is in effect a motor vehicle liability
policy for the benefit of the person required to furnish proof
of financial responsibility. Such certificate shall give the
effective date of such motor vehicle liability policy, which
date shall be the same as the effective date of the certificate,
and shall designate by explicit description or by appropriate
reference all motor vehicles covered thereby, unless the policy
is issued to a person who is not the owner of a motor vehicle.
The Commissioner may require that certificates filed pursuant to
this section be on a form approved by the Commissioner. (1953,
c. 1300, s. 19; 1955, c. 1152, s. 16.)
§ 20-279.20. Certificate furnished by nonresident as proof.
(a)The nonresident owner of a motor vehicle not
registered in this State may give proof of financial
responsibility by filing with the Commissioner a written
certificate or certificates of an insurance carrier authorized
to transact business in the state in which the motor vehicle or
motor vehicles described in such certificate is registered, or
if such nonresident does not own a motor vehicle, then in the
state in which the insured resides, provided such certificate
otherwise conforms to the provisions of this Article, and the
Commissioner shall accept the same upon condition that said
insurance carrier complies with the following provisions with
respect to the policies so certified:
(1) Said insurance carrier shall execute a power of
attorney authorizing the Commissioner to accept
service on its behalf of notice or process in any
action arising out of a motor vehicle accident in
this State; and
(2) Said insurance carrier shall agree in writing that
such policies shall be deemed to conform with the
laws of this State relating to the terms of motor
vehicle liability policies issued herein.
(b) If any insurance carrier not authorized to transact
business in this State, which has qualified to furnish proof of
financial responsibility, defaults in any said undertakings or
agreements, the Commissioner shall not thereafter accept as
proof any certificate of said carrier whether theretofore filed
or thereafter tendered as proof, so long as such default
continues.
(c) The Commissioner may require that certificates and powers
filed pursuant to this section be on forms approved by the
Commissioner. (1953, c. 1300, s. 20; 1955, c. 1152, s. 17.)
§ 20-279.21. "Motor vehicle liability policy" defined.
(a)A "motor vehicle liability policy" as said term is
used in this Article shall mean an owner's or an operator's
policy of liability insurance, certified as provided in G.S. 20-
279.19 or 20-279.20 as proof of financial responsibility, and
issued, except as otherwise provided in G.S. 20-279.20, by an
insurance carrier duly authorized to transact business in this
State, to or for the benefit of the person named therein as
insured.
(b) Such owner's policy of liability insurance:
(1) Shall designate by explicit description or by
appropriate reference all motor vehicles with
respect to which coverage is thereby to be granted;
(2) Shall insure the person named therein and any other
person, as insured, using any such motor vehicle or
motor vehicles with the express or implied
permission of such named insured, or any other
persons in lawful possession, against loss from the
liability imposed by law for damages arising out of
the ownership, maintenance or use of such motor
vehicle or motor vehicles within the United States
of America or the Dominion of Canada subject to
limits exclusive of interest and costs, with
respect to each such motor vehicle, as follows:
thirty thousand dollars ($30,000) because of bodily
injury to or death of one person in any one
accident and, subject to said limit for one person,
sixty thousand dollars ($60,000) because of bodily
injury to or death of two or more persons in any
one accident, and twenty-five thousand dollars
($25,000) because of injury to or destruction of
property of others in any one accident; and
(3) No policy of bodily injury liability insurance,
covering liability arising out of the ownership,
maintenance, or use of any motor vehicle, shall be
delivered or issued for delivery in this State with
respect to any motor vehicle registered or
principally garaged in this State unless coverage
is provided therein or supplemental thereto, under
provisions filed with and approved by the
Commissioner of Insurance, for the protection of
persons insured thereunder who are legally entitled
to recover damages from owners or operators of
uninsured motor vehicles and hit-and-run motor
vehicles because of bodily injury, sickness or
disease, including death, resulting therefrom, in
an amount not to be less than the financial
responsibility amounts for bodily injury liability
as set forth in G.S. 20-279.5 nor greater than one
million dollars ($1,000,000), as selected by the
policy owner. The provisions shall include coverage
for the protection of persons insured thereunder
who are legally entitled to recover damages from
owners or operators of uninsured motor vehicles
because of injury to or destruction of the property
of such insured, with a limit in the aggregate for
all insureds in any one accident of up to the
limits of property damage liability in the owner's
policy of liability insurance, and subject, for
each insured, to an exclusion of the first one
hundred dollars ($100.00) of such damages. The
provision shall further provide that a written
statement by the liability insurer, whose name
appears on the certification of financial
responsibility made by the owner of any vehicle
involved in an accident with the insured, that the
other motor vehicle was not covered by insurance at
the time of the accident with the insured shall
operate as a prima facie presumption that the
operator of the other motor vehicle was uninsured
at the time of the accident with the insured for
the purposes of recovery under this provision of
the insured's liability insurance policy. The
coverage required under this subdivision is not
applicable where any insured named in the policy
rejects the coverage. An insured named in the
policy may select different coverage limits as
provided in this subdivision. If the named insured
in the policy does not reject uninsured motorist
coverage and does not select different coverage
limits, the amount of uninsured motorist coverage
shall be equal to the highest limit of bodily
injury and property damage liability coverage for
any one vehicle in the policy. Once the option to
reject the uninsured motorist coverage or to select
different coverage limits is offered by the
insurer, the insurer is not required to offer the
option in any renewal, reinstatement, substitute,
amended, altered, modified, transfer, or
replacement policy unless the named insured makes a
written request to exercise a different option. The
selection or rejection of uninsured motorist
coverage or the failure to select or reject by a
named insured is valid and binding on all insureds
and vehicles under the policy. Rejection of or
selection of different coverage limits for
uninsured motorist coverage for policies under the
jurisdiction of the North Carolina Rate Bureau
shall be made in writing by a named insured on a
form promulgated by the Bureau and approved by the
Commissioner of Insurance.
Where coverage is provided on more than one
vehicle insured on the same policy or where the
owner or the named insured has more than one policy
with coverage under this subdivision, there shall
not be permitted any combination of coverage within
a policy or where more than one policy may apply to
determine the total amount of coverage available.
In addition to the above requirements relating
to uninsured motorist insurance, every policy of
bodily injury liability insurance covering
liability arising out of the ownership, maintenance
or use of any motor vehicle, which policy is
delivered or issued for delivery in this State,
shall be subject to the following provisions which
need not be contained therein.
a. A provision that the insurer shall be bound by
a final judgment taken by the insured against
an uninsured motorist if the insurer has been
served with copy of summons, complaint or
other process in the action against the
uninsured motorist by registered or certified
mail, return receipt requested, or in any
manner provided by law; provided however, that
the determination of whether a motorist is
uninsured may be decided only by an action
against the insurer alone. The insurer, upon
being served as herein provided, shall be a
party to the action between the insured and
the uninsured motorist though not named in the
caption of the pleadings and may defend the
suit in the name of the uninsured motorist or
in its own name. The insurer, upon being
served with copy of summons, complaint or
other pleading, shall have the time allowed by
statute in which to answer, demur or otherwise
plead (whether the pleading is verified or
not) to the summons, complaint or other
process served upon it. The consent of the
insurer shall not be required for the
initiation of suit by the insured against the
uninsured motorist: Provided, however, no
action shall be initiated by the insured until
60 days following the posting of notice to the
insurer at the address shown on the policy or
after personal delivery of the notice to the
insurer or its agent setting forth the belief
of the insured that the prospective defendant
or defendants are uninsured motorists. No
default judgment shall be entered when the
insurer has timely filed an answer or other
pleading as required by law. The failure to
post notice to the insurer 60 days in advance
of the initiation of suit shall not be grounds
for dismissal of the action, but shall
automatically extend the time for the filing
of an answer or other pleadings to 60 days
after the time of service of the summons,
complaint, or other process on the insurer.
b. Where the insured, under the uninsured
motorist coverage, claims that he has
sustained bodily injury as the result of
collision between motor vehicles and asserts
that the identity of the operator or owner of
a vehicle (other than a vehicle in which the
insured is a passenger) cannot be ascertained,
the insured may institute an action directly
against the insurer: Provided, in that event,
the insured, or someone in his behalf, shall
report the accident within 24 hours or as soon
thereafter as may be practicable, to a police
officer, peace officer, other judicial
officer, or to the Commissioner of Motor
Vehicles. The insured shall also within a
reasonable time give notice to the insurer of
his injury, the extent thereof, and shall set
forth in the notice the time, date and place
of the injury. Thereafter, on forms to be
mailed by the insurer within 15 days following
receipt of the notice of the accident to the
insurer, the insured shall furnish to insurer
any further reasonable information concerning
the accident and the injury that the insurer
requests. If the forms are not furnished
within 15 days, the insured is deemed to have
complied with the requirements for furnishing
information to the insurer. Suit may not be
instituted against the insurer in less than 60
days from the posting of the first notice of
the injury or accident to the insurer at the
address shown on the policy or after personal
delivery of the notice to the insurer or its
agent. The failure to post notice to the
insurer 60 days before the initiation of the
suit shall not be grounds for dismissal of the
action, but shall automatically extend the
time for filing of an answer or other
pleadings to 60 days after the time of service
of the summons, complaint, or other process on
the insurer.
Provided under this section the term
"uninsured motor vehicle" shall include, but not be
limited to, an insured motor vehicle where the
liability insurer thereof is unable to make payment
with respect to the legal liability within the
limits specified therein because of insolvency.
An insurer's insolvency protection shall be
applicable only to accidents occurring during a
policy period in which its insured's uninsured
motorist coverage is in effect where the liability
insurer of the tort-feasor becomes insolvent within
three years after such an accident. Nothing herein
shall be construed to prevent any insurer from
affording insolvency protection under terms and
conditions more favorable to the insured than is
provided herein.
In the event of payment to any person under
the coverage required by this section and subject
to the terms and conditions of coverage, the
insurer making payment shall, to the extent
thereof, be entitled to the proceeds of any
settlement for judgment resulting from the exercise
of any limits of recovery of that person against
any person or organization legally responsible for
the bodily injury for which the payment is made,
including the proceeds recoverable from the assets
of the insolvent insurer.
For the purpose of this section, an "uninsured
motor vehicle" shall be a motor vehicle as to which
there is no bodily injury liability insurance and
property damage liability insurance in at least the
amounts specified in subsection (c) of G.S. 20-
279.5, or there is that insurance but the insurance
company writing the insurance denies coverage
thereunder, or has become bankrupt, or there is no
bond or deposit of money or securities as provided
in G.S. 20-279.24 or 20-279.25 in lieu of the
bodily injury and property damage liability
insurance, or the owner of the motor vehicle has
not qualified as a self-insurer under the
provisions of G.S. 20-279.33, or a vehicle that is
not subject to the provisions of the Motor Vehicle
Safety and Financial Responsibility Act; but the
term "uninsured motor vehicle" shall not include:
a. A motor vehicle owned by the named insured;
b. A motor vehicle that is owned or operated by a
self-insurer within the meaning of any motor
vehicle financial responsibility law, motor
carrier law or any similar law;
c. A motor vehicle that is owned by the United
States of America, Canada, a state, or any
agency of any of the foregoing (excluding,
however, political subdivisions thereof);
d. A land motor vehicle or trailer, if operated
on rails or crawler-treads or while located
for use as a residence or premises and not as
a vehicle; or
e. A farm-type tractor or equipment designed for
use principally off public roads, except while
actually upon public roads.
For purposes of this section "persons insured"
means the named insured and, while resident of the
same household, the spouse of any named insured and
relatives of either, while in a motor vehicle or
otherwise, and any person who uses with the
consent, expressed or implied, of the named
insured, the motor vehicle to which the policy
applies and a guest in the motor vehicle to which
the policy applies or the personal representative
of any of the above or any other person or persons
in lawful possession of the motor vehicle.
(4) Shall, in addition to the coverages set forth in
subdivisions (2) and (3) of this subsection,
provide underinsured motorist coverage, to be used
only with a policy that is written at limits that
exceed those prescribed by subdivision (2) of this
section and that afford uninsured motorist coverage
as provided by subdivision (3) of this subsection,
in an amount not to be less than the financial
responsibility amounts for bodily injury liability
as set forth in G.S. 20-279.5 nor greater than one
million dollars ($1,000,000) as selected by the
policy owner. An "uninsured motor vehicle," as
described in subdivision (3) of this subsection,
includes an "underinsured highway vehicle," which
means a highway vehicle with respect to the
ownership, maintenance, or use of which, the sum of
the limits of liability under all bodily injury
liability bonds and insurance policies applicable
at the time of the accident is less than the
applicable limits of underinsured motorist coverage
for the vehicle involved in the accident and
insured under the owner's policy. For the purposes
of this subdivision, the term "highway vehicle"
means a land motor vehicle or trailer other than
(i) a farm-type tractor or other vehicle designed
for use principally off public roads and while not
upon public roads, (ii) a vehicle operated on rails
or crawler-treads, or (iii) a vehicle while located
for use as a residence or premises. The provisions
of subdivision (3) of this subsection shall apply
to the coverage required by this subdivision.
Underinsured motorist coverage is deemed to apply
when, by reason of payment of judgment or
settlement, all liability bonds or insurance
policies providing coverage for bodily injury
caused by the ownership, maintenance, or use of the
underinsured highway vehicle have been exhausted.
Exhaustion of that liability coverage for the
purpose of any single liability claim presented for
underinsured motorist coverage is deemed to occur
when either (a) the limits of liability per claim
have been paid upon the claim, or (b) by reason of
multiple claims, the aggregate per occurrence limit
of liability has been paid. Underinsured motorist
coverage is deemed to apply to the first dollar of
an underinsured motorist coverage claim beyond
amounts paid to the claimant under the exhausted
liability policy.
In any event, the limit of underinsured
motorist coverage applicable to any claim is
determined to be the difference between the amount
paid to the claimant under the exhausted liability
policy or policies and the limit of underinsured
motorist coverage applicable to the motor vehicle
involved in the accident. Furthermore, if a
claimant is an insured under the underinsured
motorist coverage on separate or additional
policies, the limit of underinsured motorist
coverage applicable to the claimant is the
difference between the amount paid to the claimant
under the exhausted liability policy or policies
and the total limits of the claimant's underinsured
motorist coverages as determined by combining the
highest limit available under each policy; provided
that this sentence shall apply only to insurance on
nonfleet private passenger motor vehicles as
described in G.S. 58-40-15(9) and (10). The
underinsured motorist limits applicable to any one
motor vehicle under a policy shall not be combined
with or added to the limits applicable to any other
motor vehicle under that policy.
An underinsured motorist insurer may at its
option, upon a claim pursuant to underinsured
motorist coverage, pay moneys without there having
first been an exhaustion of the liability insurance
policy covering the ownership, use, and maintenance
of the underinsured highway vehicle. In the event
of payment, the underinsured motorist insurer shall
be either: (a) entitled to receive by assignment
from the claimant any right or (b) subrogated to
the claimant's right regarding any claim the
claimant has or had against the owner, operator, or
maintainer of the underinsured highway vehicle,
provided that the amount of the insurer's right by
subrogation or assignment shall not exceed payments
made to the claimant by the insurer. No insurer
shall exercise any right of subrogation or any
right to approve settlement with the original
owner, operator, or maintainer of the underinsured
highway vehicle under a policy providing coverage
against an underinsured motorist where the insurer
has been provided with written notice before a
settlement between its insured and the underinsured
motorist and the insurer fails to advance a payment
to the insured in an amount equal to the tentative
settlement within 30 days following receipt of that
notice. Further, the insurer shall have the right,
at its election, to pursue its claim by assignment
or subrogation in the name of the claimant, and the
insurer shall not be denominated as a party in its
own name except upon its own election. Assignment
or subrogation as provided in this subdivision
shall not, absent contrary agreement, operate to
defeat the claimant's right to pursue recovery
against the owner, operator, or maintainer of the
underinsured highway vehicle for damages beyond
those paid by the underinsured motorist insurer.
The claimant and the underinsured motorist insurer
may join their claims in a single suit without
requiring that the insurer be named as a party. Any
claimant who intends to pursue recovery against the
owner, operator, or maintainer of the underinsured
highway vehicle for moneys beyond those paid by the
underinsured motorist insurer shall before doing so
give notice to the insurer and give the insurer, at
its expense, the opportunity to participate in the
prosecution of the claim. Upon the entry of
judgment in a suit upon any such claim in which the
underinsured motorist insurer and claimant are
joined, payment upon the judgment, unless otherwise
agreed to, shall be applied pro rata to the
claimant's claim beyond payment by the insurer of
the owner, operator or maintainer of the
underinsured highway vehicle and the claim of the
underinsured motorist insurer.
A party injured by the operation of an
underinsured highway vehicle who institutes a suit
for the recovery of moneys for those injuries and
in such an amount that, if recovered, would support
a claim under underinsured motorist coverage shall
give notice of the initiation of the suit to the
underinsured motorist insurer as well as to the
insurer providing primary liability coverage upon
the underinsured highway vehicle. Upon receipt of
notice, the underinsured motorist insurer shall
have the right to appear in defense of the claim
without being named as a party therein, and without
being named as a party may participate in the suit
as fully as if it were a party. The underinsured
motorist insurer may elect, but may not be
compelled, to appear in the action in its own name
and present therein a claim against other parties;
provided that application is made to and approved
by a presiding superior court judge, in any such
suit, any insurer providing primary liability
insurance on the underinsured highway vehicle may
upon payment of all of its applicable limits of
liability be released from further liability or
obligation to participate in the defense of such
proceeding. However, before approving any such
application, the court shall be persuaded that the
owner, operator, or maintainer of the underinsured
highway vehicle against whom a claim has been made
has been apprised of the nature of the proceeding
and given his right to select counsel of his own
choice to appear in the action on his separate
behalf. If an underinsured motorist insurer,
following the approval of the application, pays in
settlement or partial or total satisfaction of
judgment moneys to the claimant, the insurer shall
be subrogated to or entitled to an assignment of
the claimant's rights against the owner, operator,
or maintainer of the underinsured highway vehicle
and, provided that adequate notice of right of
independent representation was given to the owner,
operator, or maintainer, a finding of liability or
the award of damages shall be res judicata between
the underinsured motorist insurer and the owner,
operator, or maintainer of underinsured highway
vehicle.
As consideration for payment of policy limits
by a liability insurer on behalf of the owner,
operator, or maintainer of an underinsured motor
vehicle, a party injured by an underinsured motor
vehicle may execute a contractual covenant not to
enforce against the owner, operator, or maintainer
of the vehicle any judgment that exceeds the policy
limits. A covenant not to enforce judgment shall
not preclude the injured party from pursuing
available underinsured motorist benefits, unless
the terms of the covenant expressly provide
otherwise, and shall not preclude an insurer
providing underinsured motorist coverage from
pursuing any right of subrogation.
The coverage required under this subdivision
shall not be applicable where any insured named in
the policy rejects the coverage. An insured named
in the policy may select different coverage limits
as provided in this subdivision. If the named
insured does not reject underinsured motorist
coverage and does not select different coverage
limits, the amount of underinsured motorist
coverage shall be equal to the highest limit of
bodily injury liability coverage for any one
vehicle in the policy. Once the option to reject
underinsured motorist coverage or to select
different coverage limits is offered by the
insurer, the insurer is not required to offer the
option in any renewal, reinstatement, substitute,
amended, altered, modified, transfer, or
replacement policy unless a named insured makes a
written request to exercise a different option. The
selection or rejection of underinsured motorist
coverage by a named insured or the failure to
select or reject is valid and binding on all
insureds and vehicles under the policy.
Rejection of or selection of different
coverage limits for underinsured motorist coverage
for policies under the jurisdiction of the North
Carolina Rate Bureau shall be made in writing by
the named insured on a form promulgated by the
Bureau and approved by the Commissioner of
Insurance.
(c) Such operator's policy of liability insurance shall
insure the person named as insured therein against loss from the
liability imposed upon him by law for damages arising out of the
use by him of any motor vehicle not owned by him, and within 30
days following the date of its delivery to him of any motor
vehicle owned by him, within the same territorial limits and
subject to the same limits of liability as are set forth above
with respect to an owner's policy of liability insurance.
(d) Such motor vehicle liability policy shall state the name
and address of the named insured, the coverage afforded by the
policy, the premium charged therefor, the policy period and the
limits of liability, and shall contain an agreement or be
endorsed that insurance is provided thereunder in accordance
with the coverage defined in this Article as respects bodily
injury and death or property damage, or both, and is subject to
all the provisions of this Article.
(e) Uninsured or underinsured motorist coverage that is
provided as part of a motor vehicle liability policy shall
insure that portion of a loss uncompensated by any workers'
compensation law and the amount of an employer's lien determined
pursuant to G.S. 97-10.2(h) or (j). In no event shall this
subsection be construed to require that coverage exceed the
applicable uninsured or underinsured coverage limits of the
motor vehicle policy or allow a recovery for damages already
paid by workers' compensation. The policy need not insure a loss
from any liability for damage to property owned by, rented to,
in charge of or transported by the insured.
(f) Every motor vehicle liability policy shall be subject to
the following provisions which need not be contained therein:
(1) Except as hereinafter provided, the liability of
the insurance carrier with respect to the insurance
required by this Article shall become absolute
whenever injury or damage covered by said motor
vehicle liability policy occurs; said policy may
not be canceled or annulled as to such liability by
any agreement between the insurance carrier and the
insured after the occurrence of the injury or
damage; no statement made by the insured or on his
behalf and no violation of said policy shall defeat
or void said policy. As to policies issued to
insureds in this State under the assigned risk plan
or through the North Carolina Motor Vehicle
Reinsurance Facility, a default judgment taken
against such an insured shall not be used as a
basis for obtaining judgment against the insurer
unless counsel for the plaintiff has forwarded to
the insurer, or to one of its agents, by registered
or certified mail with return receipt requested, or
served by any other method of service provided by
law, a copy of summons, complaint, or other
pleadings, filed in the action. The return receipt
shall, upon its return to plaintiff's counsel, be
filed with the clerk of court wherein the action is
pending against the insured and shall be admissible
in evidence as proof of notice to the insurer. The
refusal of insurer or its agent to accept delivery
of the registered mail, as provided in this
section, shall not affect the validity of such
notice and any insurer or agent of an insurer
refusing to accept such registered mail shall be
charged with the knowledge of the contents of such
notice. When notice has been sent to an agent of
the insurer such notice shall be notice to the
insurer. The word "agent" as used in this
subsection shall include, but shall not be limited
to, any person designated by the insurer as its
agent for the service of process, any person duly
licensed by the insurer in the State as insurance
agent, any general agent of the company in the
State of North Carolina, and any employee of the
company in a managerial or other responsible
position, or the North Carolina Commissioner of
Insurance; provided, where the return receipt is
signed by an employee of the insurer or an employee
of an agent for the insurer, shall be deemed for
the purposes of this subsection to have been
received. The term "agent" as used in this
subsection shall not include a producer of record
or broker, who forwards an application for
insurance to the North Carolina Motor Vehicle
Reinsurance Facility.
The insurer, upon receipt of summons,
complaint or other process, shall be entitled, upon
its motion, to intervene in the suit against its
insured as a party defendant and to defend the same
in the name of its insured. In the event of such
intervention by an insurer it shall become a named
party defendant. The insurer shall have 30 days
from the signing of the return receipt
acknowledging receipt of the summons, complaint or
other pleading in which to file a motion to
intervene, along with any responsive pleading,
whether verified or not, which it may deem
necessary to protect its interest: Provided, the
court having jurisdiction over the matter may, upon
motion duly made, extend the time for the filing of
responsive pleading or continue the trial of the
matter for the purpose of affording the insurer a
reasonable time in which to file responsive
pleading or defend the action. If, after receiving
copy of the summons, complaint or other pleading,
the insurer elects not to defend the action, if
coverage is in fact provided by the policy, the
insurer shall be bound to the extent of its policy
limits to the judgment taken by default against the
insured, and noncooperation of the insured shall
not be a defense.
If the plaintiff initiating an action against
the insured has complied with the provisions of
this subsection, then, in such event, the insurer
may not cancel or annul the policy as to such
liability and the defense of noncooperation shall
not be available to the insurer: Provided, however,
nothing in this section shall be construed as
depriving an insurer of its defenses that the
policy was not in force at the time in question,
that the operator was not an "insured" under policy
provisions, or that the policy had been lawfully
canceled at the time of the accident giving rise to
the cause of action.
Provided further that the provisions of this
subdivision shall not apply when the insured has
delivered a copy of the summons, complaint or other
pleadings served on him to his insurance carrier
within the time provided by law for filing answer,
demurrer or other pleadings.
(2) The satisfaction by the insured of a judgment for
such injury or damage shall not be a condition
precedent to the right or duty of the insurance
carrier to make payment on account of such injury
or damage;
(3) The insurance carrier shall have the right to
settle any claim covered by the policy, and if such
settlement is made in good faith, the amount
thereof shall be deductible from the limits of
liability specified in subdivision (2) of
subsection (b) of this section;
(4) The policy, the written application therefor, if
any, and any rider or endorsement which does not
conflict with the provisions of the Article shall
constitute the entire contract between the parties.
(g) Any policy which grants the coverage required for a motor
vehicle liability policy may also grant any lawful coverage in
excess of or in addition to the coverage specified for a motor
vehicle liability policy and such excess or additional coverage
shall not be subject to the provisions of this Article. With
respect to a policy which grants such excess or additional
coverage the term "motor vehicle liability policy" shall apply
only to that part of the coverage which is required by this
section.
(h) Any motor vehicle liability policy may provide that the
insured shall reimburse the insurance carrier for any payment
the insurance carrier would not have been obligated to make
under the terms of the policy except for the provisions of this
Article.
(i) Any motor vehicle liability policy may provide for the
prorating of the insurance thereunder with other valid and
collectible insurance.
(j) The requirements for a motor vehicle liability policy may
be fulfilled by the policies of one or more insurance carriers
which policies together meet such requirements.
(k) Any binder issued pending the issuance of a motor vehicle
liability policy shall be deemed to fulfill the requirements for
such a policy.
(l) A party injured by an uninsured motor vehicle covered
under a policy in amounts less than those set forth in G.S. 20-
279.5, may execute a contractual covenant not to enforce against
the owner, operator, or maintainer of the uninsured vehicle any
judgment that exceeds the liability policy limits, as
consideration for payment of any applicable policy limits by the
insurer where judgment exceeds the policy limits. A covenant not
to enforce judgment shall not preclude the injured party from
pursuing available uninsured motorist benefits, unless the terms
of the covenant expressly provide otherwise, and shall not
preclude an insurer providing uninsured motorist coverage from
pursuing any right of subrogation. (1953, c. 1300, s. 21; 1955,
c. 1355; 1961, c. 640; 1965, c. 156; c. 674, s. 1; c. 898; 1967,
c. 277, s. 4; c. 854; c. 1159, s. 1; c. 1162, s. 1; c. 1186, s.
1; c. 1246, s. 1; 1971, c. 1205, s. 2; 1973, c. 745, s. 4; 1975,
c. 326, ss. 1, 2; c. 716, s. 5; c. 866, ss. 1-4; 1979, cc. 190,
675; c. 832, ss. 6, 7; 1983, c. 777, ss. 1, 2; 1985, c. 666, s.
74; 1985 (Reg. Sess., 1986), c. 1027, ss. 41, 42; 1987, c. 529;
1987 (Reg. Sess., 1988), c. 975, s. 33; 1991, c. 469, s. 4; c.
636, s. 3; c. 646, ss. 1, 2; c. 761, s. 12.3; 1991 (Reg. Sess.,
1992), c. 837, s. 9; 1997-396, ss. 2, 3; 1999-195, s. 1; 1999-
228, s. 4.)
§ 20-279.22. Notice of cancellation or termination of
certified policy.
When an insurance carrier has certified a motor vehicle
liability policy under G.S. 20-279.19 or a policy under G.S. 20-
279.20, the insurance so certified shall not be canceled or
terminated until at least 20 days after a notice of cancellation
or termination of the insurance so certified shall be filed in
the office of the Commissioner, except that such a policy
subsequently procured and certified shall, on the effective date
of its certification, terminate the insurance previously
certified with respect to any motor vehicle designated in both
certificates. (1953, c. 1300, s. 22.)
§ 20-279.23. Article not to affect other policies.
(a)This Article shall not be held to apply to or affect
policies of automobile insurance against liability which may now
or hereafter be required by any other law of this State, and
such policies, if they contain an agreement or are endorsed to
conform to the requirements of this Article, may be certified as
proof of financial responsibility under this Article.
(b) This Article shall not be held to apply to or affect
policies insuring solely the insured named in the policy
against liability resulting from the maintenance or use by
persons in the insured's employ or on his behalf of motor
vehicles not owned by the insured. (1953, c. 1300, s. 23.)
§ 20-279.24. Bond as proof.
(a)Proof of financial responsibility may be furnished by
filing with the Commissioner the bond of a surety company duly
authorized to transact business in the State or a bond with at
least two individual sureties each owning real estate within
this State, and together having equities in such real estate
over and above any encumbrances thereon equal in value to at
least twice the amount of such bond, which real estate shall be
scheduled in the bond which shall be approved by the clerk of
the superior court of the county wherein the real estate is
situated. Such bond shall be conditioned for payments in amounts
and under the same circumstances as would be required in a motor
vehicle liability policy, and shall not be cancellable except
after 20 days' written notice to the Commissioner. A certificate
of the county tax supervisor or person performing the duties of
the tax supervisor, showing the assessed valuation of each tract
or parcel of real estate for tax purposes shall accompany a bond
with individual sureties and, upon acceptance and approval by
the Commissioner, the execution of such bond shall be proved
before the clerk of the superior court of the county or counties
wherein the land or any part thereof lies, and such bond shall
be recorded in the office of the register of deeds of such
county or counties. Such bond shall constitute a lien upon the
real estate therein described from and after filing for
recordation to the same extent as in the case of ordinary
mortgages and shall be regarded as the equivalent of a mortgage
or deed of trust. In the event of default in the terms of the
bond the Commissioner may foreclose the lien thereof by making
public sale upon publishing notice thereof as provided by G.S.
45-21.17; provided, that any such sale shall be subject to the
provisions for upset or increased bids and resales and the
procedure therefor as set out in Part 2 of Article 2A of Chapter
45 of the General Statutes. The proceeds of such sale shall be
applied by the Commissioner toward the discharge of liability
upon the bond, any excess to be paid over to the surety whose
property was sold. The Commissioner shall have power to so sell
as much of the property of either or both sureties described in
the bond as shall be deemed necessary to discharge the liability
under the bond, and shall not be required to apportion or
prorate the liability as between sureties.
If any surety is a married person, his or her spouse shall be
required to execute the bond, but only for the purpose of
releasing any dower or curtesy interest in the property
described in the bond, and the signing of such bond shall
constitute a conveyance of dower or curtesy interest, as well as
the homestead exemption of the surety, for the purpose of the
bond, and the execution of the bond shall be duly acknowledged
as in the case of deeds of conveyance. The Commissioner may
require a certificate of title of a duly licensed attorney which
shall show all liens and encumbrances with respect to each
parcel of real estate described in the bond and, if any parcel
of such real estate has buildings or other improvements thereon,
the Commissioner may, in his discretion, require the filing with
him of a policy or policies of fire and other hazard insurance,
with loss clauses payable to the Commissioner as his interest
may appear. All costs and expenses in connection with furnishing
such bond and the registration thereof, and the certificate of
title, insurance and other necessary items of expense shall be
borne by the principal obligor under the bond, except that the
costs of foreclosure may be paid from the proceeds of sale.
(b) If such a judgment, rendered against the principal on
such bond shall not be satisfied within 60 days after it has
become final, the judgment creditor may, for his own use and
benefit and at his sole expense, bring an action or actions in
the name of the State against the company or persons executing
such bond, including an action or proceeding to foreclose any
lien that may exist upon the real estate of a person who has
executed such bond. (1953, c. 1300, s. 24; 1993, c. 553, s. 10.)
§ 20-279.25. Money or securities as proof.
(a)Proof of financial responsibility may be evidenced by
the certificate of the State Treasurer that the person named
therein has deposited with him eighty-five thousand dollars
($85,000) in cash, or securities such as may legally be
purchased by savings banks or for trust funds of a market value
of eighty-five thousand dollars ($85,000). The State Treasurer
shall not accept any such deposit and issue a certificate
therefor and the Commissioner shall not accept such certificate
unless accompanied by evidence that there are no unsatisfied
judgments of any character against the depositor in the county
where the depositor resides.
(b) Such deposit shall be held by the State Treasurer to
satisfy, in accordance with the provisions of this Article, any
execution on a judgment issued against such person making the
deposit for damages, including damages for care and loss of
services because of bodily injury to or death of any person, or
for damages because of injury to or destruction of property,
including the loss of use thereof, resulting from the ownership,
maintenance, use or operation of a motor vehicle after such
deposit was made. Money or securities so deposited shall not be
subject to attachment, garnishment, or execution unless such
attachment, garnishment, or execution shall arise out of a suit
for damages as aforesaid. (1953, c. 1300, s. 25; 1965, c. 358,
s. 1; 1967, c. 277, s. 5; 1973, c. 745, s. 5; 1979, c. 832, s.
8; 1991, c. 469, s. 8; 1999-228, s. 5.)
§ 20-279.26. Owner may give proof for others.
Whenever any person required to give proof of financial
responsibility hereunder is or later becomes an operator in the
employ of any owner, or is or later becomes a member of the
immediate family or household of the owner, the Commissioner
shall accept proof given by such owner in lieu of proof by such
other person to permit such other person to operate a motor
vehicle for which the owner has given proof as herein provided.
The Commissioner shall designate the restrictions imposed by
this section on the face of such person's license. (1953, c.
1300, s. 26.)
§ 20-279.27. Substitution of proof.
The Commissioner shall consent to the cancellation of
any bond or certificate of insurance or the Commissioner shall
direct and the State Treasurer shall return any money or
securities to the person entitled thereto upon the substitution
and acceptance of other adequate proof of financial
responsibility pursuant to this Article. (1953, c. 1300, s. 27.)
§ 20-279.28. Other proof may be required.
Whenever any proof of financial responsibility filed
under the provisions of this Article no longer fulfills the
purposes for which required, the Commissioner shall for the
purpose of this Article, require other proof as required by this
Article, or whenever it appears that proof filed to cover any
motor vehicle owned by a person does not cover all motor
vehicles registered in the name of such person, the Commissioner
shall require proof covering all such motor vehicles. The
Commissioner shall suspend the license or the nonresident's
operating privilege pending the filing of such other proof.
(1953, c. 1300, s. 28.)
§ 20-279.29. Duration of proof; when proof may be canceled
or returned.
The Commissioner shall upon request consent to the
immediate cancellation of any bond or certificate of insurance,
or the Commissioner shall direct and the State Treasurer shall
return to the person entitled thereto any money or securities
deposited pursuant to this Article as proof of financial
responsibility, or the Commissioner shall waive the requirement
of filing proof, in any of the following events:
(1) At any time after two years from the date such
proof was required when, during the two-year period
preceding the request, the Commissioner has not
received record of a conviction or a forfeiture of
bail which would require or permit the suspension
or revocation of the license, registration or
nonresident's operating privilege of the person by
or for whom such proof was furnished; or
(2) In the event of the death of the person on whose
behalf such proof was filed or the permanent
incapacity of such person to operate a motor
vehicle; or
(3) In the event the person who has given proof
surrenders his license to the Commissioner.
Provided, however, that the Commissioner shall not consent
to the cancellation of any bond or the return of any money or
securities in the event any action for damages upon a liability
covered by such proof is then pending or any judgment upon any
such liability is then unsatisfied or in the event the person
who has filed such bond or deposited such money or securities,
has, within one year immediately preceding such request, been
involved as an operator or owner in any motor vehicle accident
resulting in injury or damage to the person or property of
others. An affidavit of the applicant as to the nonexistence of
such facts, or that he has been released from all of his
liability, or has been finally adjudicated not to be liable, for
such injury or damage, shall be sufficient evidence thereof in
the absence of evidence to the contrary in the records of the
Commissioner.
Whenever any person whose proof has been canceled or
returned under subdivision (3) of this section applies for a
license within a period of two years from the date proof was
originally required, any such application shall be refused
unless the applicant shall reestablish such proof for the
remainder of such two-year period. (1953, c. 1300, s. 29.)
§ 20-279.30. Surrender of license.
Any person whose license shall have been suspended as
herein provided, or whose policy of insurance or bond, when
required under this Article, shall have been canceled or
terminated, or who shall neglect to furnish other proof upon
request of the Commissioner shall immediately return his
license to the Commissioner. If any person shall fail to return
to the Commissioner the license as provided herein, the
Commissioner shall forthwith direct any peace officer to secure
possession thereof and to return the same to the Commissioner.
(1953, c. 1300, s. 30.)
§ 20-279.31. Other violations; penalties.
(a)The Commissioner shall suspend the license of a person
who fails to report a reportable accident, as required by G.S.
20-166.1, until the Division receives a report and for an
additional period set by the Commissioner. The additional period
may not exceed 30 days.
(b) Any person who does any of the following commits a Class
1 misdemeanor:
(1) Gives information required in a report of a
reportable accident, knowing or having reason to
believe the information is false.
(2) Forges or without authority signs any evidence of
proof of financial responsibility.
(3) Files or offers for filing any evidence of proof of
financial responsibility, knowing or having reason
to believe that it is forged or signed without
authority.
(c) Any person willfully failing to return a license as
required in G.S. 20-279.30 is guilty of a Class 3 misdemeanor.
(c1)Any person who makes a false affidavit or knowingly
swears or affirms falsely to any matter under G.S. 20-279.5, 20-
279.6, or 20-279.7 is guilty of a Class I felony.
(d) Any person who shall violate any provision of this
Article for which no penalty is otherwise provided is guilty of
a Class 2 misdemeanor. (1953, c. 1300, s. 31; 1983, c. 610, s.
2; 1993, c. 539, ss. 384, 1261; 1994, Ex. Sess., c. 24, s.
14(c); 1995, c. 191, s. 7.)
§ 20-279.32. Exceptions.
This Article does not apply to a motor vehicle registered
under G.S. 20-382 by a for-hire motor carrier. This Article does
not apply to any motor vehicle owned by the State of North
Carolina, nor does it apply to the operator of a vehicle owned
by the State of North Carolina who becomes involved in an
accident while operating the state-owned vehicle if the
Commissioner determines that the vehicle at the time of the
accident was probably being operated in the course of the
operator's employment as an employee or officer of the State.
This Article does not apply to any motor vehicle owned by a
county or municipality of the State of North Carolina, nor does
it apply to the operator of a vehicle owned by a county or
municipality of the State of North Carolina who becomes involved
in an accident while operating such vehicle in the course of the
operator's employment as an employee or officer of the county or
municipality. This Article does not apply to the operator of a
vehicle owned by a political subdivision, other than a county or
municipality, of the State of North Carolina who becomes
involved in an accident while operating such vehicle if the
Commissioner determines that the vehicle at the time of the
accident was probably being operated in the course of the
operator's employment as an employee or officer of the
subdivision providing that the Commissioner finds that the
political subdivision has waived any immunity it has with
respect to such accidents and has in force an insurance policy
or other method of satisfying claims which may arise out of the
accident. This Article does not apply to any motor vehicle owned
by the federal government, nor does it apply to the operator of
a motor vehicle owned by the federal government who becomes
involved in an accident while operating the government-owned
vehicle if the Commissioner determines that the vehicle at the
time of the accident was probably being operated in the course
of the operator's employment as an employee or officer of the
federal government. (1953, c. 1300, s. 32; 1955, c. 1152, s. 19;
1979, c. 667, s. 38; 1989, c. 485, s. 54; 1995 (Reg. Sess.,
1996), c. 756, s. 18; 1999-330, s. 4.1.)
§ 20-279.32A. Exception of school bus drivers.
The provisions of this Article shall not apply to school
bus drivers with respect to accidents or collisions in which
they are involved while operating school buses in the course of
their employment. (1955, c. 1282.)
§ 20-279.33. Self-insurers.
(a)Any person in whose name more than 25 motor vehicles
are registered may qualify as a self-insurer by obtaining a
certificate of self-insurance issued by the Commissioner as
provided in subsection (b) of this section. For the purpose of
this Article, the State of North Carolina shall be considered a
self-insurer.
(b) The Commissioner may, in his discretion, upon the
application of such a person, issue a certificate of self-
insurance when he is satisfied that such person is possessed and
will continue to be possessed of ability to pay judgments
obtained against such person.
(c) Upon not less than five days' notice and a hearing
pursuant to such notice, the Commissioner may upon reasonable
grounds cancel a certificate of self-insurance. Failure to pay
any judgment within 30 days after such judgment shall have
become final shall constitute a reasonable ground for the
cancellation of a certificate of self- insurance. (1953, c.
1300, s. 33.)
§ 20-279.34: Repealed by Session Laws 1993 (Reg. Sess.,
1994), c. 761, s. 27.
§ 20-279.35. Supplemental to motor vehicle laws; repeal of
laws in conflict.
This Article shall in no respect be considered as a
repeal of any of the motor vehicle laws of this State but shall
be construed as supplemental thereto.
The "Motor Vehicle Safety and Responsibility Act" enacted by
the 1947 Session of the General Assembly, being Chapter 1006 of
the Session Laws of 1947 (G.S. 20-224 to 20-279), is hereby
repealed except with respect to any accident or violation of the
motor vehicle laws of this State occurring prior to January 1,
1954, or with respect to any judgment arising from such accident
or violation, and as to such accidents, violations or judgments
Chapter 1006 of the Session Laws of 1947 shall remain in full
force and effect. Except as herein stated, all laws and clauses
of laws in conflict with this Article are hereby repealed.
(1953, c. 1300, s. 35.)
§ 20-279.36. Past application of Article.
This Article shall not apply with respect to any
accident, or judgment arising therefrom, or violation of the
motor vehicle laws of this State, occurring prior to January 1,
1954. (1953, c. 1300, s. 37.)
§ 20-279.37. Article not to prevent other process.
Nothing in this Article shall be construed as preventing
the plaintiff in any action at law from relying for relief upon
the other processes provided by law. (1953, c. 1300, s. 38.)
§ 20-279.38. Uniformity of interpretation.
This Article shall be so interpreted and construed as to
effectuate its general purpose to make uniform the laws of those
states which enact it. (1953, c. 1300, s. 39.)
§ 20-279.39. Title of Article.
This Article may be cited as the "Motor Vehicle Safety-
Responsibility Act of 1953." (1953, c. 1300, s. 41.)