Agreement Reached on NC Auto Insurance Rates Increase

Agreement Reached on NC Auto Insurance Rates Increase

By / State News / Wednesday, 21 June 2017 04:00

RALEIGH, N.C. : June 15th, 2017 - Insurance Commissioner Mike Causey announced the signing of a settlement agreement with the North Carolina Rate Bureau in response to the Rate Bureau's Feb. 1, 2017, request for a 13.8% increase in auto insurance rates. The North Carolina Department of Insurance agreed to a lower average increase of 2.2% - a savings of more than $1 billion for NC consumers over two years.
We are pleased that we were able to work out a settlement with the Rate Bureau that saved North Carolina consumers over a billion dollars," said Causey. "It is unfortunate rates have to increase at all. But accidents from distracted driving are up, there are more people on the road because of lower gas prices, and higher medical and automobile repair costs are forcing auto rate increases all across the country."
The auto insurance rate change becomes effective for new and renewal policies beginning Oct. 1, 2017. The Rate Bureau, an independent organization representing all auto insurance companies doing business in the state, has agreed not to submit an auto rate filing in 2018 so this rate change will be in effect for two years until Oct. 1, 2019.
Last year, traffic deaths jumped to the highest level in nearly a decade. According to the National Safety Council, the number of deadly accidents increased 7% in 2015 -- and was estimated to increase 6% in 2016.
One of the biggest new factors in auto rate increases is due to distracted driving. According to a recent Wall Street Journal article, one insurance company said it had raised rates in 2015 6.5% - and expected to raise rates this year 8% - because of the impact of distracted driving.
"Recent data shows North Carolina has the seventh lowest average auto premiums in the nation," said Commissioner Causey. "Our decision to settle was based on the increase in traffic deaths and other safety factors while also maintaining competition for insurance companies and options for consumers. We'll continue to fight for lower, reasonable rates for consumers. Our number one job is to protect the consumer."
Had the case gone to hearing on Sept. 11, 2017, and the Rate Bureau had lost, the Rate Bureau by law would have been allowed to implement its 13.8% rate increase while it appealed the rate order to the NC Court of Appeals and the NC Supreme Court. It also would have been allowed to continue making annual rate filing for auto rate increases. Consumers could have been paying unwarranted higher rates for months and possibly years until the case was resolved by the courts.
Timeline
Feb. 1, 2017: The NC Rate Bureau files a request for a 13.8% auto rate insurance increase with the NC Department of Insurance companies.
March 24, 2017: NC Insurance Commissioner Mike Causey announces that his office has concerns about the NC Rate Bureau's requested auto insurance rate increase and issues a notice of hearing for Sept. 11, 2017, in Raleigh.
June 9, 2017: Insurance Commissioner Causey and the NC Rate Bureau
come to a settlement agreement and avoid a rate hearing, settling at an average 2.2% auto insurance rate increase rather than the filed overall rate of 13.8% increase. The new rates will become effective on Oct. 1, 2017.
Source: North Carolina Department of Insurance.

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