State orders decrease in auto insurance rates
North Carolina Insurance Commissioner Jim Long today signed an order requiring a 16.1 percent reduction in private passenger auto rates and a 11.7 percent reduction in motorcycle liability rates, effective Jan. 1.
The state held hearings in July and August after the Rate Bureau requested a 12.9 percent increase in rates. During the hearings, the department's attorney argued that the market for auto insurance had not changed significantly since last year, when companies did not seek a rate increase, according to a news release.
The Rate Bureau can appeal Long's decision through the court system. Companies could then raise rates while awaiting the appeals decision, and the difference in the ordered rate and the implemented rate must be held in escrow. If the Rate Bureau loses its appeal, the escrowed money plus interest would be refunded to policyholders.
Under state law, Long sets the maximum allowable rate that auto insurance companies can charge in North Carolina; companies can and regularly do offer discounts to their policyholders.
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