Proof of residency required for North Carolina auto policies
March 27, 2020
Zurich North America is requiring brokers and agents to submit two proof-of-residency documents for commercial auto policies issued or delivered in North Carolina.
North Carolina requires insurance providers and their agents take reasonable steps to verify proof of residency for commercial auto policies issued or delivered in the state.
To ensure that the applicant's address and the place the motor vehicle is garaged is correct, Zurich North America is requiring that brokers and agents submit two verification documents on commercial auto policies issued or delivered in North Carolina. This requirement is effective immediately for every new and renewal submission package.
What constitutes proof of residency?
Two of the six following verification documents are deemed acceptable by the state as proof of North Carolina residency or eligible risk status:
- A utility bill in the name of the applicant showing a North Carolina address for the principal place of business of the applicant
- A receipt for real property taxes paid by the applicant to a North Carolina locality within the preceding 12-month period, which shows the applicant's current North Carolina address
- A valid North Carolina vehicle registration issued to the applicant showing the applicant’s current North Carolina address (i.e., an actual copy of the registration)
- A federal income tax return filed by the applicant for the most recent prior filing period, which shows the applicant’s name and current North Carolina address
- The valid North Carolina driver’s license of an owner of an applicant that is a corporation or an LLC, provided that the person holds at least 20% ownership interest in the applicant corporation or LLC
- If the principal place of business of a corporation or LLC is the primary residence of the sole owner, any of the five documents listed above, whether in the name of the corporation or LLC or in the name of the sole owner (“sole owner” can mean an individual or a husband and wife)
We believe that items No. 1 (utility bill), No. 2 (property tax receipt) and No. 3 (vehicle registration) may be the easiest to obtain, but producers can choose any two of the six items listed above.
Below is additional information regarding this new requirement.
Proof-of-residency requirements – FAQs
Q: Why is Zurich requiring this now?
A: Insurance providers and their agents are required by North Carolina statute to take reasonable steps to verify that certain information provided by an applicant is correct. Even though this requirement is typically for personal lines, North Carolina is now requiring it for commercial lines with any private passenger type (PPT) vehicles.
Zurich must ensure that we are in compliance with this state requirement. For that reason, Zurich requires proof of residency prior to binding, and will maintain these documents in our files. Noncompliance could subject Zurich to fines and penalties.
Q: Which North Carolina auto policies fall within the scope of proof-of-residency requirements?
A: Policies that contain PPT vehicles fall within the scope.
Q: Are there North Carolina auto policies that do not fall within the scope of the proof-of-residency requirements?
A: We are not requiring proof of residency for North Carolina auto policies that are hired/non-owned only policies, municipalities/cities, and auto rental counter products.
Q: Are agents and brokers required to verify proof of residency at renewal as well?
A: Yes. Zurich requires two documents showing proof of residency for all new business submissions as well as renewals.
Q: Can I quote auto liability without these documents?
A: Yes. You can quote auto liability without the proof-of-residency documents, but you will not be able to bind coverage until Zurich receives these documents.
Q: Does this requirement apply to only North Carolina-domiciled business?
A: Yes. If a North Carolina address is on the declarations page, this requirement applies if there are also PPTs on the policy that are garaged in North Carolina.
Q: What happens if we have an insured whose principal location of primary operation is in another state, but they have some autos garaged in North Carolina (e.g., vehicles for sales personnel)?
A: In this scenario, we would not need proof of residency for the applicant. It applies only to customers whose principal location is in North Carolina.
Q: If the agent and broker is choosing one of the proof-of-residency documents by providing auto registration (No. 3 above), is a registration document required for every auto?
A: No. If item No. 3 is selected, we would only need one valid North Carolina vehicle registration issued to the applicant for a PPT vehicle located at the applicant’s address.
Q: If the agent or broker is choosing proof of residency by providing a utility bill (No. 1), property tax receipt (No. 2), income tax return (No. 4), driver’s license of an owner (No. 5), or any of the five documents defined under No. 6, are documents required for every auto?
A: No. We only need one valid North Carolina document issued to the applicant for a PPT vehicle located at the applicant’s address. Two required proof-of-residency documents will satisfy the verification request for an insured/applicant.
For example, if an account includes 1,000 PPTs, Zurich would need just two proof-of-residency documents for that account.
Q: Who can I contact if I have additional questions?
A: If you have additional questions, please contact the underwriter assigned to your submission.