North Carolinians will see their auto insurance rates increase by 4.5% on Dec. 1 or after and again in 2024 because of a settlement reached between the North Carolina Department of Insurance (NCDOI) and insurance companies. Motorcycle liability will also increase 2.3% on or after Dec.1 and in 2024.
The increase will take effect on new and renewed policies.
In a press release, NC Insurance Commissioner Mike Causey said that those increases could have been much worse. On Feb. 1, the North Carolina Rate Bureau requested an overall average statewide increase of 28.4 % for private passenger auto rates and 4.7% for motorcycle liability.
By law, the bureau must submit auto rate filings with the department annually by Feb. 1.
The average cost for car insurance in the state is $1446 for annual coverage, which is below the national average of $1771 per year for full coverage, according to Bankrate.com. A rate increase of 4.5% would bring the cost up $65 to $1511 or a monthly rate of $121 to $126.
According to valuepenguin.com, the average cost of motorcycle insurance is $936 a year or $78 per month in NC. A rate increase of 4.7% would bring the cost up $44 to $980 or a monthly rate of $82.
A report in Feb. from the research firm stated that rates were expected to increase by 8.4% across the U.S.
According to the press release, the settlement cancels a hearing scheduled for later this year, avoiding a lengthy administrative legal battle that would have cost consumers time and money.
Causey cited a 2023 study from U.S. News and World Report that ranked the Tar Heel State as having the sixth lowest average annual automobile insurance costs in the country.
“I’m proud that North Carolina is consistently among the lowest annual average rates for private passenger vehicles in the nation,” said Causey. “In recent years, we’ve seen some rate increases due to more accidents and fatalities in North Carolina. This can be attributed to factors such as excessive speeding and driving under the influence.”
He said, however, that distracted driving is the number one cause of accidents and, thus, the rate increases. He said that we will unlikely see rate decreases in the future unless some of these trends change.
The Rate Bureau represents the insurance industry in North Carolina and is not a part of the DOI.