Residents of North Carolina have been awaiting a proposed increase in auto insurance in 2018. Automobile insurance companies in the state were asking for an approximate 14% increase in automobile insurance, which was alarming to most car owners in the state. North Carolina’s insurance regulator has reached a deal with automobile insurance companies to keep the increase in rates at just 2% in 2018.

 

The settlement agreement was made between North Carolina’s Insurance Commissioner Mike Causey and the North Carolina Rate Bureau. The 2% increase will save residents of North Carolina $1 billion over the next two years.

 

North Carolina Rate Increase

 

The rate increase comes at the heels of more accidents on North Carolina roads that have been caused by distracted drivers. Low gas prices have caused more drivers to be on the road, but medical expenses and automobile repair costs have increased across the United States in the last year.

 

The rate change affects new and renewed automobile insurance policies that were purchased on or after October 1^st, 2017. This will be the rate until October 1^st, 2019. This has been the first rate change in North Carolina since 2009, although the costs around automobiles and the insurance industry have been going up marginally from 2009 to the present. This rate increase is to help the insurance industry keep up with the rising risk of insuring drivers in North Carolina.

 

Insurance Rate Change Factors

 

There are a few factors that have caused the automobile insurance rates in North Carolina to go up. Automobile insurance companies were pushing for a rate increase of 13%, but the Insurance Commissioner negotiated a smaller rate increase in order to better prepare residents for a rate increase. Additionally, a smaller rate increase will be viable for two years, whereas a rate increase pushed by auto insurance companies would be negotiable every year.

 

The North Carolina insurance rate increase is influenced by a rise in traffic deaths, which has also occurred across the nation. Traffic deaths in North Carolina increased by 8.1% between 2014 and 2015. Injuries to drivers and passengers increased by 11.8% during that same time period, and reported automobile crashes were up by 11.1%.

 

Drivers in North Carolina are also spending more time on the road, driving longer hours and more miles. More miles were driven in 2015 than in the previous five years, increasing drivers’ chances for getting into trouble on the road.

 

Additionally, inflation has caused an increase in overall prices for automobiles and related services. Inflation in 2016 increased vehicle repair costs by 2.4%, and total medical care costs for traffic incidents have increased by 3.8%.

 

Impaired and distracted drivers have contributed to increases in insurance rates as well. In 2015, impaired drivers in alcohol-related crashes increased 13.2%. Distracted driving is being increasingly curtailed by stricter distracted driving laws around the nation; there were 7% more crashes that were attributed to distracted driving in 2015 than in previous years.

 

Car Insurance for North Carolina Drivers

 

Drivers in North Carolina pay an average of $88 per month for car insurance and $1,060 per year. Car insurance rates depend on a few factors, which can make this payment more or less for some drivers. Age, driving history, location, and type of car can all be factors that influence the cost of a car insurance payment.

If you have been involved in a car accident, have a DUI or DWI, are a new driver, or drive a high-risk or valuable vehicle, your rate may be higher than average. These risk factors can all push your car insurance rates up. Discounts for safe driving, taking safe driver courses, and seniors might be eligible for car insurance discounts, but every insurance company is different.

 

Motorists who drive in North Carolina must have an automobile insurance policy that has a few minimum limits. These include:

 

• Coverage for bodily injury
• Coverage for property damage
• Uninsured motorist property damage (per accident)
• Uninsured motorist bodily injury

 

Drivers and automobile owners in North Carolina who own vehicles may find that their insurance rates will be higher than average this year, because of new car insurance legislation. Drivers should be prepared for a rate increase, but don’t have to worry about the rate increasing anymore until October of 2019.