Auto insurers want a 22.6% hike on rates for North Carolina drivers

Owning a vehicle could get a lot more expensive for North Carolina drivers very soon.

The details: The North Carolina Rate Bureau—which represents automobile insurance companies in the state—filed a request with the Department of Insurance to implement a statewide average 22.6% insurance rate increase for N.C. motorists. 

• Insurance companies have requested that the rates take effect on October 1, pending a review by North Carolina’s commissioner of insurance, who, by state law, has 60 days to assess the request.

• In the event the state’s commissioner (Mike Causey) does not agree with the request, he and the Department of Insurance can negotiate a settlement or call for a hearing regarding the matter.

• The 22.6% increase follows a February 2023 filing by insurance companies in the state to raise insurance rates by 28.4%, which resulted in a 4.5% increase per year for two years.  

What they’re saying: “This request reflects the fact that vehicles and repairs are getting more expensive, partly because automakers pack so much technology into modern vehicles. Accidents have become more common, partly because distracted driving has eroded driving habits. Vehicle weights are up, and so is horsepower, both of which make accidents more severe,” said Jarred Chappell, COO of the N.C. Rate Bureau.

Zooming in: The North Carolina Rate Bureau’s most recent request to raise the insurance rate, includes varied increases across different coverage types.

• The N.C. Rate Bureau is requesting an increase of 75.8% for comprehensive physical damage and a 3.7% increase for collision coverage.

• Rates for liability coverages would include a 47.6% increase for uninsured motorists and a 41.1% increase for underinsured motorists.

• Property damage rates would see a 26.7% increase, while bodily injury coverage would see a 13% requested increase.   

Between the lines: The rate request comes just five months before new minimum auto liability coverage requirements take effect on July 1. The 50/100/50 limits—among the highest in the nation—are projected to increase motorists’ premiums by an average of $50 per year.

Bottom line: While North Carolina has a history of pushing back against steep insurance rate hikes, the pressure from rising repair costs, more severe accidents, and higher minimum coverage requirements is making premium increases harder to avoid. Even if regulators negotiate a lower rate increase, drivers are still likely to see higher insurance costs in the coming months.

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