The deal will save drivers $1.6 billion over the next two years.
RALEIGH — Insurance Commissioner Mike Causey today announced an agreement with the North Carolina Rate Bureau on auto insurance rates. The settlement is about two-thirds less than what the insurance companies had requested.
On February 1, the Rate Bureau called for an overall statewide average increase of 28.4% for private passenger car rates and 4.7% for motorcycle liability. The agreement provides a statewide average auto rate increase of 4.5% in 2023 and another 4.5% in 2024. The agreement also includes motorcycle liability increases of 2.3% in 2023 and 2.3% in 2024. The Bureau of Rates represents the insurance industry in North Carolina and is not part of the Department of Insurance.
The settlement will save drivers approximately $1.6 billion over the next two years compared to the Rate Bureau’s request. In addition, the settlement cancels a hearing scheduled for later this year, avoiding a lengthy administrative legal battle that would have cost consumers time and money.
According to a 2023 study by US News and World Report, North Carolina ranked as the sixth lowest state for average annual auto insurance costs.
“I am proud that North Carolina consistently ranks among the lowest average annual private passenger vehicle rates in the nation,” said Commissioner Causey. “In recent years, we have seen some increases in rates due to more accidents and deaths in North Carolina. This can be attributed to factors like speeding and driving under the influence. However, the number one cause of accidents, and therefore rate increases, is distracted driving. It is unlikely that we will see rate declines in the future unless some of these trends change. Drivers and driving habits have the biggest impact on rates, in addition to higher repair costs due to excessive inflation. We don’t want any rate increases, but we are doing everything we can to protect consumers.”
The increase will take effect on new and renewed policies beginning December 1. By law, the office must submit auto rate applications to the department every year by February 1.
Photo by Sarah Brown on Unsplash
