North Carolina body shop laws: what insurers and shops must do

What it means in North Carolina

Policies must let your customer pick the shop. The insurer, its producers, adjusters and appraisers may recommend a shop only by clearly telling your customer they don't have to use it, can use any shop, will be paid the insurer's amount either way, and that the insurer or its representative has a financial interest in that shop. The insurer can't require repairs at a shop it owns. A 2026 law adds a 10-business-day payment deadline for claims arising on or after October 1, 2026.

A 2026 law (S.L. 2026-41) changes this section's payment terms for claims arising on or after October 1, 2026; the text shown does not include that change.

The law's own words

“A policy covering damage to a motor vehicle shall allow the claimant to select the repair service or source for the repair of the damage.”

G.S. 58-3-180, ncleg.gov text through S.L. 2026-30

“No insurer or insurer representative shall recommend the use of a particular motor vehicle repair service without clearly informing the claimant that (i) the claimant is under no obligation to use the recommended repair service, (ii) the claimant may use the repair service of the claimant's choice,”

G.S. 58-3-180, ncleg.gov text through S.L. 2026-30

“No insurer shall require that the insured or claimant must have a damaged vehicle repaired at an insurer-owned motor vehicle repair service.”

G.S. 58-3-180, ncleg.gov text through S.L. 2026-30

What it means in North Carolina

On a total loss, the insurer is responsible for reasonable towing and storage until 3 days after it tells the owner and the storage facility in writing that it will stop paying. It also can't abandon the salvage to a tow or storage business without that business's consent. On jobs over $350, unless the customer waives the estimate in writing, your estimate must state the daily storage charge after the work is done. You have a lien for reasonable storage charges.

The insurer rule is a total-loss rule. The estimate rule applies to repair work over $350 unless the customer waives the estimate in writing.

The law's own words

Shop

“The written repair estimate shall also include a statement allowing the customer to indicate whether replaced parts should be saved for inspection or return and a statement indicating the daily charge for storing the customer's motor vehicle after the customer has been notified that the repair work has been completed.”

G.S. 20-354.3, ncleg.gov text through S.L. 2026-30

Shop

“Any person who repairs, services, tows, or stores motor vehicles in the ordinary course of the person's business pursuant to an express or implied contract with an owner or legal possessor of the motor vehicle, except for a motor vehicle seized pursuant to G.S. 20-28.3, has a lien upon the motor vehicle for reasonable charges for such repairs, servicing, towing, storing”

G.S. 44A-2, ncleg.gov text through S.L. 2026-30

Insurer

“The insurance company shall be responsible for all reasonable towing and storage charges until three days after the motor vehicle's owner and storage facility are notified in writing that the insurance company shall no longer reimburse the motor vehicle's owner or storage facility for storage charges.”

11 NCAC 04 .0418, effective 10/1/2020

Insurer

“No insurance company shall abandon the salvage of a total loss motor vehicle to a towing or storage service without the consent of the towing or storage service involved.”

11 NCAC 04 .0418, effective 10/1/2020

What it means in North Carolina

Your lien starts when you get the car and ends the moment you voluntarily give it back; getting it back later doesn't revive it. It beats every lender on the title. If the bill is unpaid 30 days after it's due, notify the DMV and pay $16.75, or send the DMV-approved certified-mail form yourself; anyone notified has 10 days to ask for a court hearing. Report a car unclaimed 10 days to the DMV within five days, or lose storage for the delay. In a dispute, your customer can sue, pay your lien amount to the court clerk, and get the car released.

Owners and others notified have 10 days to request a judicial hearing. A vehicle unclaimed 10 days must be reported to DMV within five days, or storage for the delay is lost.

The law's own words

Keep the car

“Any person who repairs, services, tows, or stores motor vehicles in the ordinary course of the person's business pursuant to an express or implied contract with an owner or legal possessor of the motor vehicle, except for a motor vehicle seized pursuant to G.S. 20-28.3, has a lien upon the motor vehicle for reasonable charges for such repairs, servicing, towing, storing,”

G.S. 44A-2, ncleg.gov text through S.L. 2026-30

Keep the car

“Liens conferred under this Article arise only when the lienor acquires possession of the property and terminate and become unenforceable when the lienor voluntarily relinquishes the possession of the property upon which a lien might be claimed,”

G.S. 44A-3, ncleg.gov text through S.L. 2026-30

Sell or title it

“If the charges for which the lien is claimed under this Article remain unpaid or unsatisfied for 30 days or, in the case of towing and storage charges on a motor vehicle, 10 days following the maturity of the obligation to pay any such charges, the lienor may enforce the lien by public or private sale as provided in this section.”

G.S. 44A-4, ncleg.gov text through S.L. 2026-30

Sell or title it

“If the property upon which the lien is claimed is a motor vehicle that is required to be registered, the lienor following the expiration of the relevant time period provided by subsection (a) shall give notice to the Division of Motor Vehicles that a lien is asserted and sale is proposed and shall remit to the Division a fee of sixteen dollars and seventy-five cents ($16.75).”

G.S. 44A-4, ncleg.gov text through S.L. 2026-30

Get it back

“If in any such action the owner or other party requests immediate possession of the property and pays the amount of the lien asserted into the clerk of the court in which such action is pending, the clerk shall issue an order to the lienor to relinquish possession of the property to the owner or other party.”

G.S. 44A-4, ncleg.gov text through S.L. 2026-30

What it means in North Carolina

In North Carolina the insurer can require aftermarket parts only if they're at least equal to the original in fit, quality, performance and warranty, and its estimate must cover any modifications they need. It must give the claimant a 10-point notice with the estimate. Aftermarket parts must be identified on the estimate and invoice, and you can't swap used, rebuilt or salvaged parts for new without telling the owner and a known insurer. Billing OEM while installing non-OEM violates G.S. 58-3-180.

G.S. 58-36-95 covers exterior sheet metal or plastic parts not made by or for the original manufacturer; the rules define an aftermarket part as any part made by a nonoriginal manufacturer. An insurer that intends to require or specify aftermarket parts must also print a notice in the policy or on a sticker attached to it (11 NCAC 04 .0427). The 20-354.8 duty to notify the insurer applies when the repair is paid under a policy and the insurer or adjuster has been disclosed to you.

The law's own words

Insurer

“An insurer shall disclose to a claimant in writing, either on the estimate or on a separate document attached to the estimate, the following in no smaller than ten point type: "THIS ESTIMATE HAS BEEN PREPARED BASED ON THE USE OF AUTOMOBILE PARTS NOT MADE BY THE ORIGINAL MANUFACTURER.”

G.S. 58-36-95, ncleg.gov text through S.L. 2026-30

Shop

“It is a violation of G.S. 58-3-180 for an automobile repair facility or parts person to place a nonoriginal crash repair part, nonoriginal windshield, or nonoriginal auto glass on a motor vehicle and to submit an invoice for an original repair part.”

G.S. 58-36-95, ncleg.gov text through S.L. 2026-30

Shop

From a list that begins: “It shall be a violation of this Article for any motor vehicle repair shop or employee of a motor vehicle repair shop to do any of the following:”

“Substitute used, rebuilt, salvaged, or straightened parts for new replacement parts without notice to the motor vehicle owner and to his or her insurer if the cost of repair is to be paid pursuant to an insurance policy and the identity of the insurer or its claims adjuster is disclosed to the motor vehicle repair shop.”

G.S. 20-354.8, ncleg.gov text through S.L. 2026-30

Parts standard

“No insurer shall require the use of an aftermarket part in the repair of a motor vehicle unless the aftermarket part is at least equal to the original part in terms of fit, quality, performance, and warranty. Insurers specifying the use of aftermarket parts shall include in the estimate the costs of any modifications made necessary by the use of aftermarket parts.”

11 NCAC 04 .0426, effective 11/1/2021

Insurer

From a list that begins: “Every insurer that writes motor vehicle insurance in this State and that intends to require or specify the use of after market parts must disclose to its policyholders in writing, either in the policy or on a sticker attached thereto, the following information in all capital letters and font size no smaller than ten-point:”

“IN THE REPAIR OF YOUR COVERED AUTO UNDER THE PHYSICAL DAMAGE COVERAGE PROVISIONS OF THIS POLICY, WE MAY REQUIRE OR SPECIFY THE USE OF AUTOMOBILE PARTS NOT MADE BY THE ORIGINAL MANUFACTURER. THESE PARTS ARE REQUIRED TO BE AT LEAST EQUAL IN TERMS OF FIT, QUALITY, PERFORMANCE AND WARRANTY TO THE ORIGINAL MANUFACTURER PARTS THEY REPLACE. All after market parts installed on a motor vehicle shall be identified on the estimate and invoice for such repair.”

11 NCAC 04 .0427, effective 12/1/2021

What it means in North Carolina

North Carolina's appraisal right covers a claim against the at-fault driver's insurer over how much the car's value dropped from before to after the accident. When coverage isn't disputed and the two figures are more than $2,000 or 25% of pre-accident retail value apart, whichever is less, either side can demand appraisal in writing and name a licensed appraiser within 20 days. Each side pays its own appraiser and they split the rest; the result binds both unless either rejects it within 15 days.

Applies to motor vehicle liability policies, for disputes over the difference in value before and after the accident. Appraisers and the umpire must be licensed motor vehicle damage appraisers, can't decide liability or coverage, and the umpire can't award more or less than the appraisers' figures. An insurer that fails to comply faces a civil penalty, and the appraisal reports must be exchanged (11 NCAC 04 .0421).

The law's own words

Appraisal right

“(d1) Such motor vehicle liability policy shall provide an alternative method of determining the amount of property damage to a motor vehicle when liability for coverage for the claim is not in dispute.”

G.S. 20-279.21, ncleg.gov text through S.L. 2026-30

Appraisal right

“(2) The difference in the claimant's and the insurer's estimate of the diminution in fair market value is greater than two thousand dollars ($2,000) or twenty-five percent (25%) of the fair market retail value of the vehicle prior to the accident”

G.S. 20-279.21, ncleg.gov text through S.L. 2026-30

How appraisal works

“then on the written demand of either the claimant or the insurer, each shall select a competent and disinterested appraiser and notify the other of the appraiser selected within 20 days after the demand. The appraisers shall then appraise the loss. Should the appraisers fail to agree, they shall then select a competent and disinterested appraiser to serve as an umpire.”

G.S. 20-279.21, ncleg.gov text through S.L. 2026-30

How appraisal works

“If the report is not rejected within 15 days from the filing of the report, the report shall be binding upon both the claimant and the insurer. Each appraiser shall be paid by the party selecting the appraiser, and the expenses of appraisal and umpire shall be paid by the parties equally.”

G.S. 20-279.21, ncleg.gov text through S.L. 2026-30

Other dispute rules

“The claimant's voluntary utilization of a drive-in claim service or preferred repair shop shall not prejudice the right of either party to obtain independent appraisals and negotiate settlement on the basis of such appraisals.”

11 NCAC 04 .0417, effective 10/1/2021

What it means in North Carolina

North Carolina has no labor rate or survey law. Your customer picks the shop, and the insurer must pay the amount it decides is payable no matter which shop does the work. A 2026 session law requires payments, supplements included, within 10 business days after settlement on claims arising on or after October 1, 2026. Trying to settle for less than a reasonable person would think is owed is an unfair practice when done as a general business practice.

G.S. 58-63-15(11) creates no cause of action for anyone other than the Commissioner. The 10-business-day rule rewrites G.S. 58-3-180(b) for claims arising on or after October 1, 2026, and the codified page did not yet show it. A violation of 58-3-180 carries a civil penalty of up to $2,000.

The law's own words

Related claim rule

From a list that begins: “Committing or performing with such frequency as to indicate a general business practice of any of the following:”

“h. Attempting to settle a claim for less than the amount to which a reasonable man would have believed he was entitled;”

G.S. 58-63-15, ncleg.gov text through S.L. 2026-30

Related claim rule

From a list that begins: “Committing or performing with such frequency as to indicate a general business practice of any of the following:”

“f. Not attempting in good faith to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear;”

G.S. 58-63-15, ncleg.gov text through S.L. 2026-30

What the insurer pays

“(a) A policy covering damage to a motor vehicle shall allow the claimant to select the repair service or source for the repair of the damage. (b) The amount determined by the insurer to be payable under a policy covering damage to a motor vehicle shall be paid regardless of the repair service or source selected by the claimant.”

G.S. 58-3-180, ncleg.gov text through S.L. 2026-30

Related claim rule

From a list that begins: “the insurer shall adhere to the following procedures:”

“(2) Mail or deliver loss and claim payments within 10 business days after the claim is settled. Supplemental claims shall be handled in the same manner.”

S.L. 2026-41, s. 32.3, effective 10/1/2026

Related claim rule

“(6) An insurer shall, upon request, provide copies of the original estimate and all supplemental estimates to the claimant.”

11 NCAC 04 .0419, effective 10/1/2020

What it means in North Carolina

North Carolina has no rule on capping paint and materials. The unfair claims law bars the insurer from failing to try in good faith to settle promptly and fairly once liability is reasonably clear, and from failing to explain a compromise offer. On request, the insurer must give your customer copies of the original and all supplemental estimates. Whether a low materials allowance breaks these rules is a question for the Department of Insurance or a lawyer.

The unfair claims rules count only as a general business practice, and the statute says a violation creates no right to sue for anyone but the Commissioner. The estimate rule covers first-party claims the insurer covers and third-party claims where liability is established.

The law's own words

Related claim rule

From a list that begins: “Committing or performing with such frequency as to indicate a general business practice of any of the following:”

“Not attempting in good faith to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear;”

G.S. 58-63-15, ncleg.gov text through S.L. 2026-30

Related claim rule

From a list that begins: “Committing or performing with such frequency as to indicate a general business practice of any of the following:”

“Failing to promptly provide a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement.”

G.S. 58-63-15, ncleg.gov text through S.L. 2026-30

Related claim rule

“An insurer shall, upon request, provide copies of the original estimate and all supplemental estimates to the claimant.”

11 NCAC 04 .0419, effective 10/1/2020

What it means in North Carolina

For claims arising on or after October 1, 2026, session-law text adds to the statute a duty to mail or deliver payment within 10 business days after the claim settles, supplements included, matching the Department's rule. The insurer must also inspect the car, physically or digitally, within 10 business days of the claim, or explain the delay. The act rewrites only subsection (b) of G.S. 58-3-180, and that section's unchanged penalty clause caps the civil fine for a violation at $2,000.

S.L. 2026-41 applies to claims arising on or after 10/1/2026 and is not yet shown in the G.S. 58-3-180 page text. The Department's inspection and payment rules count as violations when frequent enough to show a general business practice; the inspection rule covers covered first-party claims and third-party claims once liability is established. No captured text adds interest for late payment, and a violation of G.S. 58-63-15(11) does not by itself give anyone but the Commissioner a cause of action.

The law's own words

Respond

From a list that begins: “Committing or performing with such frequency as to indicate a general business practice of any of the following:”

“b. Failing to acknowledge and act reasonably promptly upon communications with respect to claims arising under insurance policies;”

G.S. 58-63-15, ncleg.gov text through S.L. 2026-30

Pay

“(2) Mail or deliver loss and claim payments within 10 business days after the claim is settled. Supplemental claims shall be handled in the same manner." SECTION 32.3.(b) This section becomes effective October 1, 2026, and applies to claims arising on or after that date.”

S.L. 2026-41, s. 32.3, effective 10/1/2026

If late

“(c) Any person who violates this section is subject to the applicable provisions of G.S. 58-2-70 and G.S. 58-33-46, provided that the maximum civil penalty that can be assessed under G.S. 58-2-70(d) for a violation of this section is two thousand dollars ($2,000).”

G.S. 58-3-180, ncleg.gov text through S.L. 2026-30

Accept or deny

“(2) An insurer shall perform a physical or digital inspection of the damaged vehicle within 10 business days of receipt of the claim. If the insurer cannot perform the inspection in the timeframe, the insurer shall provide the claimant with a verbal or written explanation of the reason the inspection has not occurred.”

11 NCAC 04 .0419, effective 10/1/2020

Pay

“(b) When a motor vehicle is damaged and the claim is covered by an insurer, the insurer shall adhere to the following procedures concerning loss and claim payments. (1) Loss and claim payments shall be mailed or delivered within 10 business days after the claim is settled.”

11 NCAC 04 .0421, effective 10/1/2020