North Carolina drivers could face a substantial increase in auto insurance rates following a recent filing by the North Carolina Rate Bureau, which seeks an average 22.6% statewide rate hike. The proposed changes, set to take effect Oct. 1 if approved, are currently under review by the state’s Department of Insurance.
Insurance Commissioner Mike Causey has 60 days to evaluate the request. If he rejects it, the process may lead to negotiations or a formal hearing. In previous cases, Causey has denied similar rate hike requests, including a 28.4% proposed increase for personal auto insurance in 2023, which was ultimately reduced to 4.5% over two years.
The proposed rate adjustments vary significantly across different coverage types, according to a report from AM Best. The largest requested increase is a 75.8% hike for comprehensive physical damage coverage, while liability coverages would also see sharp rises, including a 47.6% increase for uninsured motorists and a 41.1% increase for underinsured motorists.
Collision coverage rates are set to rise by 3.7%, and property damage coverage could jump by 26.7%. Bodily injury coverage is expected to see a 13% increase, while medical payments coverage faces the smallest proposed adjustment at just 0.4%.
Motorcycle insurance is the only category with a proposed decrease, with a 9% reduction recommended.
While the Department of Insurance has not yet commented on the latest request, spokesperson Jason Tyson told Insurance Business that auto insurance rates are typically affected by factors such as distracted driving, speeding, impaired driving and rising vehicle repair costs.
A precedent for rate denials exists. In 2024, Causey rejected a 42% rate increase request for homeowners insurance, resulting in negotiations that lowered the approved increase to 7.5%. He later stated that North Carolina homeowners will save approximately $777 million in premiums over two years compared to what insurers originally requested.
If the current auto insurance rate proposal is denied, a similar negotiation process could unfold, potentially leading to a lower approved rate increase. However, if approved as filed, the new rates could significantly impact policyholders across the state.
