North Carolina drivers will see a 5% average increase in personal auto insurance rates following a settlement reached between the North Carolina Department of Insurance and the North Carolina Rate Bureau.
The new rate adjustment, set to take effect Oct. 1, is a sharp reduction from the 22.6% hike initially proposed by the rate bureau earlier this year. The agreement also eliminates the need for a public hearing, which had been scheduled to begin on Sept. 22.
Insurance commissioner Mike Causey said the settlement helps manage rising costs linked to trends such as distracted driving, higher vehicle repair costs and speeding.
“With factors such as distracted driving, excessive speeding and increased automobile repair costs putting upward pressure on insurance rates, I am happy that we were able to hold the average increase to 5%,” Causey said in a statement.
The rate bureau, which represents insurers in the state, routinely submits proposed rate changes. Causey has historically rejected these initial requests, triggering a negotiation process that often results in lower approved rates.
A similar process occurred with a 42% proposed hike in homeowners’ insurance rates in 2024. That proposal led to lengthy hearings before parties agreed on a more modest 7.5% increase for 2025 and 2026.
The latest agreement also includes a 16.3% average decrease in motorcycle liability insurance rates, a steeper cut than the 9% reduction initially recommended by the rate bureau.
According to the settlement, the new auto insurance rates will remain in effect until Oct. 1, 2026. The bureau is expected to submit its next rate filing by Feb. 1, 2026.
Data from BestLink show that the five largest writers of private passenger auto insurance in North Carolina during 2024 were:
What are your thoughts on the approved increase in rates? Share your insights below.
