RALEIGH, N.C. (WTVD) -- Drivers in North Carolina will be paying higher rates for car insurance starting December 1.
The increase is the result of a settlement reached between insurance companies and state regulators.
"I've always said no to any rate increases. I'm not a fan of rate increases, but at the same time, we have to make sure the insurance companies are solvent, viable and we maintain a healthy automobile insurance market," explained NC Insurance Commissioner Mike Causey.
The average driver will see a 4.5% increase this December and then another 4.5% increase next December; for a total of 9% increase over the next two years. Motorcycle liability will increase by 2.3% on the same dates.
The increase is much lower than the 28.4% increase the North Carolina Rate Bureau initially requested.
"This particular settlement saved consumers over $1.6 billion -- that's billion with a 'B.' So there's a big difference between paying a 28% increase and a 5% to 10% increase," Causey said.
The increase stems from a variety of nationwide factors.
"When you have a combination of repair costs going up, the price of cars going up and accident increases, it puts a strain on insurance company budgets. And unfortunately, insurance companies pass those strains along to customers in the form of higher rates," explained Rob Bhatt, a licensed insurance agent and QuoteWizard analyst.
While all drivers will be impacted, some may be facing an even steeper rate hike.
"It's usually safe to say that if you're someone who's maintained a good driving record, without any recent accidents or tickets over the past three years, your rate should not increase as much as someone who has had increased accidents and tickets," said Shannon Martin, an insurance agent and Bankrate analyst.
Rates may also be higher for younger drivers and consumers with newer cars.
Insurance experts told ABC11 if drivers' annual coverage is set to be renewed before the hikes take effect, they may be able to avoid the increase for a little while.
"You might be able to put off the pain for a little bit of time. You know, eventually, you will pay the higher rate, but I guess the longer you could avoid it, the better off you can be," Bhatt said.
Martin said since drivers do have time they should start by talking to their local insurance provider and compare rates across providers.
"The more companies you shop, with, the better," she said. "Then also ask about any discounts that you might be eligible for."
Discounts are usually available for young drivers who have good grades or take a driving program.
She cautioned against adjusting any liability coverage limits but did suggest taking a look at some of the details in the policies.
"Like your towing or lockout coverage. If you already have a plan with AAA or maybe your credit card company, you can take that off your auto policy," Martin said.
She also said if your household has a second car maybe you can cut costs for rental car coverage.
"If you're still working from home and you're driving less, you might be eligible for a low mileage discount. Or if you've recently retired, for example, and don't drive very much, you might want to try a pay-per-mile program," suggested Bhatt.
Other tips include:
- Link monthly auto payments to a bank account rather than a credit or debit card
- Bundle auto and home or rental insurance
- Enroll in a safe driving program through your provider
In the long run, drivers can save by maintaining good credit scores and a good driving record.
Rates are not expected to increase again before Oct. 1, 2025.
North Carolina's auto rates still rank as one of the lowest in the country. The average North Carolina driver pays around $1,400 per year; around $600 less than the average American, according to data from Bankrate.
Bhatt said future nationwide insurance increases will largely depend on the trend of car accidents and the economy.
"Inflation leveling off is also a good sign for insurance rates leveling off. In the meantime, it is good to shop around if you've been with your same company for a few years. If you like them, by all means, stick with them. But getting quotes and comparing rates is free and most companies will give you quotes for free upon request," Bhatt said.