North Carolina Auto Insurers Set to Dole Out Refunds and Cut Back Rates
A recent settlement between North Carolina Insurance Commissioner Wayne Goodwin and the North Carolina Rate Bureau (NCRB) means that an estimated one million of North Carolina auto insurance policy holders will be receiving a refund check from their insurance company. Refund checks will begin hitting mailboxes in mid 2010.
In 2008, the NCRB, which represents the state's 144 auto insurance companies, requested a 15 percent rate increase. Former Insurance Commission Jim Long, well known for his efforts in keeping auto insurance rates in North Carolina the lowest in the country, refused the increase and demanded a decrease. The NCRB appealed the decision, setting the rate increase at 9.4 percent in the interim while the case was being decided. The higher rate went into effect in January of this year, raising premiums state-wide.
A settlement agreement between the North Carolina Department of Insurance and the NCRB was announced on July 15. The settlement will eliminate the 9.4 percent increase; decrease rates an additional 0.5 percent and lock in the lowered rates until October 1, 2011. The new rates are scheduled to go into effect in November, but will be retroactive to January.
According to Commissioner Wayne Goodwin, about one in every four North Carolina policy holders will receive a refund check, depending on how much they were overcharged. Auto insurance refunds are estimated to be in the $50 to $110 range. Drivers who already receive discounts, such as safe driver or multi car discounts, might not receive a refund. However, all drivers will benefit from the reduced rates, which are slightly under 2006 rates.
The settlement is expected to save North Carolina auto insurance policy holders approximately $545 million over a 5 year period. This includes the estimated $50 million in auto insurance refunds scheduled to be sent out to eligible policy holders.
According to a chart found on the website for the North Carolina Department of Insurance, an experienced Raleigh driver with no points and typical policy limits who drives a 2008 Ford Taurus could expect to see approximately $92 a year in savings. The same driver in Durham could save $102 a year in insurance premiums.
“I'm thrilled that North Carolina drivers will see a decrease in their auto insurance rates,” said Insurance Commissioner Wayne Goodwin. “This settlement is a great deal and is terrific news for consumers. In this economy, every dollar counts, and I am committed to protecting consumers through fair ratemaking.”
Brendan Byrnes, a spokesman for AAA Carolinas, said, “We applaud Commissioner Goodwin for trying to save North Carolina motorists money during these difficult economic times.”