State regulators and insurance companies have reached a settlement on the latest request to raise automobile insurance base rates in North Carolina starting this fall.
The settlement also has a range of small and large increases, and in some cases matched or was even lower, than what the N.C. Rate Bureau requested for Outer Banks and northeastern N.C. drivers.
According to N.C. Insurance Commissioner Mike Causey, the settlement provides for an average statewide increase of 5%, which is 17.6% lower than what was requested in February by the Rate Bureau.
The agreement also includes an average statewide 16.3% decrease in motorcycle liability insurance base rates.
The Rate Bureau represents more than 100 companies that write policies in the state, and is not part of the N.C. Department of Insurance.
Terms of the settlement include that the updated rates will go into effect on October 1 for new and renewing policies, and remain in effect until at least for one year.
The latest settlement comes two years after another settlement was reached that led to an increase of 4.5% in each of the last two years.
The request also followed a new state law that went into effect on January 1 that increased the minimum liability limits for auto insurance in North Carolina to $50,000 for one person and $100,000 for two or more people per accident
The new law also increased property damage coverage to $50,000.
“With factors such as distracted driving, excessive speeding and increased automobile repair costs putting upward pressure on insurance rates, I am happy that we were able to hold the average increase to 5%,” Causey said. “I’m also glad that the agreement will keep North Carolina’s average automobile premiums among the lowest in the nation.”
Rate Bureau COO Jarred Chappell agreed that the state will continue to be one of least expensive, while carriers continue to deal with a number of factors driving cost.
“For some reason, during and coming out of the pandemic, many people’s driving habits worsened,” Chappell said in a statement.
“Meanwhile, vehicles today are often rolling computers, with sensors in bumpers, mirrors, headlights and windshields – some of the very pieces most likely to be damaged, even in a minor crash,” Chappell said.
“As this data from the Federal Reserve Bank shows, vehicle repair costs have unfortunately gone through the roof,” Chappell said. “Parts are more expensive, towing fees are higher, we have a shortage of auto mechanics in this country – anyone who’s bought a vehicle recently or had repairs done has seen the changes, and insurance premiums have not kept pace.”
“Today’s settlement will not bridge that gap, but it will help, and we’re appreciative as always to the Department of Insurance for engaging in what can be a contentious process,” Chappell said.
“It’s important that state regulators allow insurance carriers to charge reasonable rates so that a large number of insurers want to do business in North Carolina and compete on price,” Chappell said.
For drivers that live in northeastern North Carolina, the Rate Bureau was asking for comprehensive coverage rates to increase between 62% and 66%.
In Territory 110, which includes all of Dare, Currituck, Camden and Pasquotank counties and Ocracoke Island, the settlement calls for a $50,000/$100,000 liability bodily injury policy base rate to cost $213; and a $50,000 property damage policy will have a base rate of $302.
A liability medical payment policy with a $500 deductible in Territory 110 will cost $13; a full coverage comprehensive physical damage policy will cost $134; and a $100 deductible collision policy will cost $647.
In Territory 120, which includes mainland Hyde County and the rest of the northeast corner of the state, a $50,000/$100,000 bodily injury policy will have a base rate of $256; and a $50,000 property damage policy will cost $297.
The medical payment policy with a $500 deductible in Territory 120 costs $17; full coverage comprehensive physical damage policy costs $221; and a $100 deductible collision policy will cost $746.
