Under North Carolina law, what should you do before you cancel your vehicle's liability insurance?
-
A.
Pay a lapse-in-coverage fee at the license office
-
B.
Wait until the six-month policy term expires
-
C.
Surrender the vehicle's valid license plate Correct
-
D.
Notify DMV of the cancellation date
The answer is "Surrender the vehicle's valid license plate"
To avoid a fine or penalty, you must surrender the vehicle's valid license plate before you cancel or let the liability policy lapse. Drivers who have handled other cancellations by simply telling DMV after the fact assume the state accepts the same order of operations here.
The traps in the wrong answers
A. Pay a lapse-in-coverage fee at the license office
The manual names no lapse fee to pay in place of surrendering the plate. This answer treats the surrender step as something a small payment could replace.
B. Wait until the six-month policy term expires
Coverage cannot lapse mid-term or at term end while the plate is still active. This answer confuses the policy's six-month renewal cycle with a permitted moment to drop coverage.
D. Notify DMV of the cancellation date
Notifying DMV alone does not stop the fine; the plate has to come off first. This answer assumes a phone call or email to DMV satisfies the same rule the plate surrender does.
This question tests your knowledge of Insurance & Financial Responsibility in North Carolina. Source: North Carolina Driver Handbook, "Vehicle Registration Renewal," p.99..
Related North Carolina questions
- What is the minimum liability coverage required for a commercial motor vehicle in North Carolina? →
- When applying for a driver license in North Carolina, what insurance-related document must you provide? →
- If DMV is notified that a vehicle owner is operating without proper liability insurance, how long can the vehicle's license plate be revoked? →
- How long must North Carolina drivers keep liability insurance in force on a registered vehicle? →
- Does North Carolina honor a grace period after a liability insurance policy lapses? →
You just took one North Carolina question apart. The book does it for the whole test.
The North Carolina book unlocks a free companion: an adaptive study plan, progress synced across your devices, a denser laminate cheat sheet, and a test-day walkthrough. Verify your copy once, usually in seconds; there's nothing extra to buy.
Paperback, free companion included.