Auto Insurance Rates Likely Going Up in N.C. During 2017
For years, North Carolina has boasted some of the lowest car insurance premiums in the country, but those golden days for drivers in the state may be waning. The state’s insurers have reached a settlement with regulators for a 2.2% increase in auto insurance rates statewide. The rate hike will take effect on October 1.
The 2.2% figure represents a much smaller increase than what the state’s insurers wanted. The N.C. Rate Bureau, which represents all insurance companies doing business in the state, filed a request in February with the North Carolina Department of Insurance for a rate increase of 13.8%.
The insurers cited a 7% increase in crashes stemming from distracted driving and a 13.2% rise in alcohol-related traffic deaths as factors that were increasing the average cost and severity of insurance claims. They also said that rising medical costs and higher auto body repair bills played a role in the rate-hike request as well.
“All of these [factors] together are why we are requesting an increase at this point,” said Ray Evans, general manager of the Rate Bureau, which represents all insurers doing business in the state.
As part of the final settlement with the N.C. Rate Bureau, the state’s insurers agreed not to request a rate increase in 2018.
Distraction and Higher Repair Costs Fuel Proposed Insurance Rate Hikes in North Carolina
Insurance experts say that several key factors have combined in recent years to make auto insurance claims more expensive than ever. Some of the most important among those factors include:
- Higher repair costs: New, high-tech vehicles with advanced safety features and peripherals are much more expensive to maintain and fix compared to older models. While they may help avert crashes and can sometimes lessen the severity of injuries when collisions do happen, added features like parking-assist cameras are easily damaged during an auto accident and are costly to repair or replace.“[A fender-bender] used to be just fixing a bumper,” Allstate spokesperson Adam Polack told the Charlotte Observer. “Now [the bumper] has a backup camera in it. So, cars are more expensive to fix.”
- Distracted driving: Mobile devices are fueling an epidemic of distracted driving on our roads, and the result is that auto accidents and related fatalities are on the rise nationwide after years of steady decline. According to the 2015 installment in an annual driver behavior survey from State Farm, more than one in three motorists surveyed admitted to texting while driving and 29% said they often browsed the internet behind the wheel.“It’s interesting to observe how the number and types of distractions available on cell phones have grown over the years we have conducted this annual survey,” said Chris Mullen, director of technology research at State Farm, regarding the survey’s results.In addition, many vehicles today are equipped with voice-activated systems for making phone calls, setting GPS, and adjusting the heat or radio. While drivers tend to believe these hands-free systems allow them to multitask safely, studies show otherwise. A 2015 study from the AAA Foundation for Traffic Safety, for example, concluded that voice-based systems in cars are “cognitively demanding and ought not to be used indiscriminately while operating a motor vehicle.”
- More miles driven: In recent years, low gas prices and a rebounding economy have encouraged people to drive more and take longer trips when they do. In North Carolina, drivers traveled 13% more miles in 2015 compared to the average total over the previous five years. Not surprisingly, this jump in miles traveled has coincided with higher crash rates in the state; the N.C. Department of Motor Vehicles reported that driving-related fatalities increased 8.1% in 2015 from the year before, while injuries increased 11.8% and reported crashes rose 11.1%.
- Alcohol-related wrecks: North Carolina has recently seen a surge in alcohol-related traffic fatalities, although highway safety experts have so far struggled to explain why. In 2015, the state experienced a 13.2% increase in alcohol-impaired-driving fatalities compared to the previous year. This spike came after five decades of steady decline in drunk driving deaths.
Clearly, some of these factors should concern North Carolina drivers, as they indicate that the insurance rate hike is a symptom of serious statewide highway safety issues. While individuals are ultimately responsible for their own actions behind the wheel, N.C. residents should also look to law enforcement officials and highway safety authorities to develop practical measures to combat the ongoing epidemic of distracted driving and the recent spike in alcohol-related traffic deaths.
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Nelson, K. (2016, September 19). North Carolina has second-lowest car insurance premiums nationwide, according to report. Wsoctv.com. Retrieved from http://www.wsoctv.com/news/local/north-carolina-has-second-lowest-car-insurance-premiums-nationwide-but-rates-are-on-the-rise/447639977
Ranii, D. (2017, February 9). NC auto insurers seek 13.8 percent rate hike. The News & Observer. Retrieved from http://www.newsobserver.com/news/business/article131736244.html
Ranii, D. (2017, June 15). Your auto insurance rates are going up – but less than insurers wanted. The News & Observer. Retrieved from http://www.newsobserver.com/news/business/article156389224.html
Smith, C. (2017, March 15). 4 reasons your NC car insurance will very likely rise this year. The Charlotte Observer. Retrieved from http://www.charlotteobserver.com/news/business/article138378218.html
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