Refunds, Rate Cuts Set for Motorists
North Carolina motorists will be receiving refunds and reductions in car insurance rates, Insurance Commissioner Wayne Goodwin announced this week.
According to a news release, Godwin signed a settlement with the North Carolina Rate Bureau that will roll back private passenger auto insurance rates to just under 2006 levels. The changes will go into effect on Nov. 1, and are retroactive to Jan. 1. The North Carolina Rate Bureau (NCRB) is an independent organization that represents all auto insurance companies in the state.
The settlement eliminates a 9.4 percent rate increase in 2008 implemented by the bureau and denies its 2009 request for an additional 1.4 percent rate increase and includes an additional .5 percent decrease.
Under the settlement, the NCRB may not file changes to auto rates until 2011, which means that the maximum allowable auto rates are locked in until Oct. 1, 2011 at the earliest, the news release said.
This will save North Carolina policyholders an estimated $545 million over this time period, the release said.
"I'm thrilled that North Carolina drivers will see a decrease in their auto insurance rates," Goodwin said. "Drivers will not only see lower rates, but also many will receive refund checks beginning in mid-2010 that may together total more than $50 million. In this economy, every dollar counts, and I am committed to protecting consumers through fair rate-making."
The refunds stem from a dispute between the department and the NCRB over rates ordered in 2008. During the appeals process, the NCRB implemented an interim 9.4 percent rate increase that went into effect Jan.1 of this year.
In cases where insurance companies charged policyholders more than the rates determined by this settlement, insurance companies are required by statute to refund the difference between the rates charged and the settled rates, with interest.
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