Published December 7, 2023 at 11:00 AM PST | Reading time: 2 minutes
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North Carolina has some of the lowest car insurance rates in the country, according to Insurify data. But many Tarheel drivers will see their car insurance rates increase by a total of 9% by the end of 2024, thanks to a settlement between the state’s insurance commissioner and the organization that represents North Carolina’s insurance industry.
Currently, the average annual cost of a full-coverage policy in North Carolina is $1,512, Insurify data shows. Minimum-coverage policies average $648 annually. With the coming increases, those averages could rise to $1,648 for full coverage and $706 for liability-only policies.
Details of the settlement
Earlier in 2023, Insurance Commissioner Mike Causey announced a settlement between the state and the North Carolina Rate Bureau (NCRB). Under the settlement, auto insurers can increase rates for new and renewing policies issued on or after Dec. 1, 2023, by 4.5%. In 2024, they’ll be able to increase rates by another 4.5%.
The NCRB had requested a 28.4% increase in February. Under state law, insurers must submit requests for rate increases to the Department of Insurance.
In a press release announcing the settlement, Causey’s office said the settlement will save drivers about $1.6 billion over the next two years compared to the increase the bureau initially sought. Additionally, the settlement heads off a potentially long and costly administrative battle between the department and the bureau, the commissioner’s statement said.
Why North Carolina rates are rising
Inflation and the rising cost of auto parts have pushed car insurance costs higher across the country in 2023, according to a recent Insurify report.
Causey said a growing number of accidents and fatalities are also contributing to car insurance rate increases in North Carolina.
The number of accidents in the Tarheel state increased just 0.8% in 2022, according to the North Carolina Department of Transportation. Speed was a factor in nearly 24% of 2022 fatalities in the state. The National Highway Traffic Safety Administration estimates fatalities in the state increased 3.5% in the first half of 2023.
“However, the number one cause of accidents and this, rate increases, [in North Carolina] is distracted driving,” Causey said. “It is unlikely that we will see rate decreases in the future unless some of these trends change. Drivers and driving habits impact rates the most, in addition to increased repair costs due to excessive inflation.”
New and renewed policies taking effect after Dec. 1 will be subject to the rate increase. Drivers are likely to see an additional 4.5% increase in 2024, as the settlement between Causey and the bureau splits a 9% increase over two years.
State law requires auto insurers to file auto rates with the department by Feb. 1 each year.
Evelyn PimplaskarEditor-in-Chief, Director of Content
Evelyn Pimplaskar is Insurify’s director of content. With 30-plus years in content creation – including 10 years specializing in personal finance – Evelyn’s done everything from covering volatile local elections as a beat reporter to building fintech content libraries from the ground up.
Before joining Insurify, she was editor-in-chief at Credible, where she launched and developed the lending marketplace’s media partnership’s content initiative and managed the restructuring of the editorial team to enhance content production efficiency. Formerly, as tax editor for Credit Karma, Evelyn built a library of more than 300 educational articles on federal and state taxes, achieving triple-digit year-over-year growth in e-files from organic search.
Her early career included work as a content marketer, vice president and managing officer of a boutique public relations agency, chief copy editor for 14 weekly Forbes publications, reporting for large and mid-sized daily newspapers, and freelancing for the Associated Press.
Evelyn is passionate about creating personal finance content that distills complex topics into relatable, easy-to-understand stories. She believes great content helps empower readers with the information they need to make important personal finance decisions.