Hearing set on request to raise auto insurance rates in North Carolina

A hearing has been scheduled for this fall on a request by companies that offer auto insurance in North Carolina for another rate hike, two years after a settlement was reached on an increase of 4.5% in each of the last two years.

State Insurance Commissioner Mike Causey has set September 22 as the hearing date for the North Carolina Rate Bureau’s proposed statewide average increase of 23%.

For drivers that live along the Outer Banks and in mainland northeastern North Carolina, companies are asking for comprehensive coverage rates to increase between 62% and 66% for new and renewing policies starting October 1.

The request follows a new state law that increased the minimum liability limits for auto insurance in North Carolina to $50,000 for one person, $100,000 for two or more people per accident, and increased property damage coverage to $50,000.

The previous minimums were $30,000/$60,000/$25,000.

The Rate Bureau represents the automobile insurance companies in the state and is not a part of the North Carolina Department of Insurance.

“This request reflects the fact that vehicles and repairs are getting more expensive, partly because automakers pack so much technology into modern vehicles,” said N.C. Rate Bureau Chief Operating Officer Jarred Chappell when the request was made last month.

“Accidents have become more common, partly because distracted driving has eroded driving habits,” Chappell said. “Vehicle weights are up, and so is horsepower, both of which make accidents more severe.”

“North Carolina has some of the lowest auto rates in the country, and an increase is needed to ensure a large number of companies want to write policies in the state,” Chappell said.

“We are not in agreement with the Rate Bureau’s proposed increases filed on Feb. 3. The next step, according to statute, is to set a hearing date,” said Causey in a Thursday press release. “The purpose of the hearing is to reach a resolution that will make the most financial sense for both North Carolina residents and insurance companies.”

In Territory 110, which includes all of Dare, Currituck, Camden and Pasquotank counties and Ocracoke Island, a $50,000/$100,000 liability bodily injury policy would increase by 8.4% to a base rate of $236; a $50,000 property damage policy rises 20.7% with a base rate of $334; and a combined policy increases by 15.3%.

A medical payment policy with a $500 deductible in Territory 110 would drop by 0.3% to a base rate of $13; a full coverage comprehensive physical damage policy increases by 65.8% to $219, and a $100 deductible collision policy increases by 3% to $669.

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 increases by 13.9% with a $283 base rate; a $50,000 property damage policy rises 24.4% to $329; and a combined policy increases by 19.3%.

The medical payment policy with a $500 deductible in Territory 120 decreases by 0.2% to $17; full coverage comprehensive physical damage policy increases by 62.4% to $363; and a $100 deductible collision policy goes up 1.1% to $772.

The statewide average increase requested is 22.6%, with a statewide average liability insurance rate level increase of 21.9% and 23.4% for physical damage, while the statewide liability rate for motorcycles would drop by 9%.