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Bill

SB 905

Foster Care Motor Vehicle Insurance.

2025-2026 Session Introduced by Mujtaba Mohammed and 1 co-sponsor

Provides state-funded support to ensure foster youth have access to motor vehicle liability coverage, including premium assistance and deductibles up to $1,000.

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WeVote Research Nonpartisan
Bill Summary · SB 905

Summary: North Carolina Senate Bill 905 (Session 2025) — Foster Care Motor Vehicle Insurance

Purpose and intent

  • Establishes a framework to ensure foster children and youth receiving foster care have access to motor vehicle liability coverage.
  • Creates a foster care automobile insurance financial assistance program to help pay higher premiums or non-owner policy costs and to subsidize deductibles.
  • Provides for the North Carolina Rate Bureau to create a named driver exclusion endorsement for foster children and to develop an optional policy form for named non-owner coverage.
  • Sets eligibility criteria tied to driver education and required administrative rules.

Key provisions and changes

1) Named driver exclusion endorsement for foster care (G.S. 20-309(a2))

  • The Rate Bureau must establish a named driver exclusion endorsement for foster children (persons receiving foster care) living in a foster household.
  • Endorsement rules:
    • Available to any foster care recipient during the coverage period.
    • Shall not be denied simply because the foster child resides with a household that already has motor vehicle liability coverage.
    • Provides coverage for the operation of any nonfleet passenger vehicle furnished or available for regular use by the foster care recipient.
  • If a foster parent stops providing foster care, the owner may terminate the endorsement.

2) Optional policy form for named non-owner coverage (G.S. 58-36-44A)

  • The Rate Bureau must develop an optional policy form or endorsement for named non-owner passenger liability coverage for persons receiving foster care, filed with the Commissioner for approval by October 1, 2026.
  • This would align with the criteria in G.S. 20-309(a2).

3) Foster care automobile insurance financial assistance program (G.S. 131D-10.9D)

  • Establishes a state program to provide financial assistance for:
    • (i) Premium increases when adding a foster care recipient to a foster parent’s owner’s policy.
    • (ii) Premium costs for a non-owner policy issued to a foster care recipient.
    • (iii) Deductibles up to $1,000 for claims arising from the foster care recipient operating a vehicle.
  • Eligibility requirements:
    • The foster care recipient must be covered by an eligible policy and must complete a state-approved driver education program (offered by public high school, nonpublic secondary school, or licensed driver training school).
  • Administration: The Social Services Commission will adopt implementing rules.

4) Financial appropriation

  • Appropriates $1,000,000 in nonrecurring funds to the Department of Health and Human Services for the 2026-2027 fiscal year to implement the act.

Effective dates and timeline

  • Sections 1 and 2 (named driver exclusion endorsement and the policy form) become law when the act becomes law.
  • Section 3 (financial assistance program) becomes effective July 1, 2026.
  • The remaining provisions become effective January 1, 2027, and apply to policies issued or renewed on or after that date.
  • Rate Bureau endorsement forms and policy options must be filed and approved by October 1, 2026.

Who is affected

  • Foster children/recipients of foster care who need motor vehicle liability coverage.
  • Foster parents and households providing foster care (coverage implications and potential premium changes).
  • Insurance providers and the North Carolina Rate Bureau (development and approval of endorsements and policy forms).
  • Department of Health and Human Services (administration of the financial assistance program) and the Social Services Commission (rulemaking).
  • Individuals seeking driver education as a prerequisite for eligibility.

Potential impact

  • Improves access to legally required auto liability coverage for foster youths, including scenarios where a foster child uses a vehicle in a foster home.
  • Helps mitigate increased premiums or the cost burden of non-owner policies for foster care recipients.
  • Establishes standardized, state-approved policy options to avoid gaps in coverage for foster youths.
  • Requires investment of state funds to support implementation, starting with a $1 million nonrecurring appropriation for the first year.

If you’d like, I can provide a plain-language comparison of current law vs. proposed changes, or a brief FAQ for foster families and insurance providers.

Compiled from official sources — confirm details with the bill’s official record.

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