Auto insurance rates are set to rise an average of 5% across North Carolina on new and renewed policies starting after Oct. 1. State Insurance Commissioner Mike Causey announced the increase in a press release on Monday as part of a settlement with the North Carolina Rate Bureau (NCRB).
NCRB represents insurance companies that write automobile insurance policies in North Carolina and is not a part of the Department of Insurance. The agreement also means that a hearing scheduled on the rate request for Sept. 22 has been canceled.
There is some good news, however, as the NCRB originally requested a statewide average increase of 22.6% in automobile insurance rates in February. The agreement also includes an average statewide 16.3% decrease in motorcycle liability insurance rates.
“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.”
NC Rate Bureau Chief Operating Officer Jarred Chappell agrees with Causey that the state has some of the lowest auto premiums in the country but also stresses that today’s settlement won’t bridge the gap, but it will help.
“We’re appreciative, as always, to the Department of Insurance for engaging in what can be a contentious process,” he said in an emailed statement to Carolina Journal. “Insurance carriers are dealing with quite a few cost drivers. For some reason, during and coming out of the pandemic, many people’s driving habits worsened. 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 included a data chart from the Federal Reserve Bank that shows vehicle repair costs have risen substantially. He also said that parts are more expensive, towing fees are higher, and there is a shortage of auto mechanics in the country.
“Anyone who’s bought a vehicle recently or had repairs done has seen the changes, and insurance premiums have not kept pace,” he told CJ.
Chappell further noted that 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.
“North Carolina has historically worked to strike a balance, with some of the country’s lowest rates and more than 100 companies writing policies,” he stated.
The rate increase follows a February 2023 request by NCRB in which the insurance companies requested a statewide 28.4% increase for auto insurance rates. NCDOI reached a settlement with NCRB, resulting in a 4.5% increase in 2023 and 2024, with motorcycle liability rates increasing 2.3% in those years.
Homeowners’ insurance rates increased on average by 7.5% on new and renewed policies as of June 1 and will rise another 7.5% on June 1, 2026. The increases were part of an agreement between North Carolina Insurance Commissioner Mike Causey’s office and the North Carolina Rate Bureau (NCRB), which represents homeowners’ insurance companies in North Carolina. He announced the agreement in January.
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