Explore the implications of a proposed 22.6% hike in auto insurance rates in North Carolina and its impact on drivers statewide.
North Carolina is preparing for a significant discussion surrounding a proposed 22.6% average increase in automobile insurance rates. This proposal will be addressed in a public hearing scheduled to begin on September 22, as announced by the state’s insurance commissioner, Mike Causey.
The rate hike request was initially submitted in February by the North Carolina Rate Bureau, but was promptly denied by Commissioner Causey, who has a consistent record of challenging initial proposals for rate increases. The North Carolina Department of Insurance has confirmed the timeline for this crucial hearing.
Once the hearing concludes, Commissioner Causey will have a 45-day window to deliver his decision. However, it is important to note that the bureau and the department can reach a settlement at any point during this process, which might conclude the hearing prematurely.
Lengthy hearings are not unusual in North Carolina. For instance, a recent home insurance rate case extended from October to December 2024, resulting in a negotiated compromise from an initial 42% increase down to a 7.5% rise.
The proposed auto insurance filing seeks a 75.8% increase specifically for comprehensive physical damage coverage, marking it as the most significant among the varied coverage categories. Additionally, a modest 3.7% increase is proposed for collision coverage, whereas motorcycle policies might see a 9% rate decrease.
Several factors are driving the upward trend in auto insurance costs within the state. These include escalating vehicle replacement expenses, increasingly complex repair processes due to advanced vehicle technologies, and a notable rise in litigated claims.
Mark Friedlander, senior director of media relations at the Insurance Information Institute (Triple-I), highlighted, “Another contributing factor is the losses incurred from nearly 23,000 vehicles declared totaled due to the catastrophic flooding caused by Hurricane Helene last autumn.”
Attempts to gather comments from the North Carolina Rate Bureau have been unsuccessful thus far.
According to BestLink, the top five providers of private passenger auto insurance in North Carolina for 2023 included Allstate Insurance Group with an 18.8% market share, followed by State Farm Group at 14.9%, Berkshire Hathaway Insurance Group at 12.82%, Progressive Insurance Group at 11.68%, and North Carolina Farm Bureau Insurance Group with 9.95%.
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