Auto insurance rates are rising in NC. Commissioner defends his deal with the industry.

The first of two auto insurance rate increases for North Carolina consumers begins Thursday, as a settlement that Insurance Commissioner Mike Causey reached with the industry this summer starts to take effect.

Causey says he made a good deal. But a candidate challenging him in next year’s election says the timing of those rate increases and how they were handled were designed with Causey’s re-election in mind, rather than the interests of consumers.

Premiums will go up 4.5% for private passenger car policies issued or renewed after Nov. 30. Another 4.5% hike is scheduled for the same time next year. The numbers are averages; actual rate increases can vary depending on factors such as geography and the availability of discounts.

The combined increase of slightly more than 9% is far less than the industry asked for. The N.C. Rate Bureau, which represents auto insurers in the state, filed a request in February for an average rate increase of 28.4% effective this fall.

David Wheeler, a Democrat from Spruce Pine who wants to replace Causey, a Republican, said he thinks he split the increase in two so people would be less likely to notice and deliberately timed the second hit after next year’s election.

“I think it was a political decision,” Wheeler said in an interview. “He’s desperate to be re-elected, and he’s putting those dates at times that would have the least political impact on him.”

Causey said splitting the rate hike over two years was actually a concession by the industry, which wanted three times that much all this year. The settlement prevents the industry from asking for another increase next year.

“The rate bureau cannot have another request to raise consumer rates til after 2025,” he said. “That seemed fair.”

Wheeler is one of two people who have said they will try to unseat Causey next year. Former state Rep. Robert Brawley, an insurance agent from Mooresville, says he will challenge Causey in the Republican primary in the spring.

Wheeler, who declared his candidacy in March, has other problems with the way Causey handles auto insurance rates. He says Causey negotiates with the industry behind closed doors, without holding hearings to present the data and hear from the public.

“There’s just no transparency in the process,” Wheeler said. “I’d listen to the industry, but I’d also bring in some consumer advocates who may see these rate increases differently or have different facts surrounding them.”

Causey says he encourages public feedback and provides an email address for that purpose. Since he became commissioner in January 2017, he says his office has received more than 30,000 emails from the public on proposed homeowners and auto insurance rate increases.

“I can tell you not one person — not one person — has said please raise my insurance rates,” he said. “They all say, ‘Hold down the rates. It’s all we can do to pay for the premiums now.’ So I hear loud and clear what the public is saying.”

What’s causing insurance premiums to go up?

Causey says driver behavior is the top reason for the auto insurance rate increases — speeding and impaired driving, but especially distracted driving, he says. Too many people are texting or otherwise fiddling with their phones while behind the wheel, he says, and the resulting crashes increase the cost of insuring drivers overall.

Inflation is another factor, he says. Car repairs have gotten particularly expensive. While overall consumer prices were up 3.2% in October compared to a year earlier, auto repairs and maintenance costs were up 9.6% year over year, according to the U.S. Bureau of Labor Statistics. Car repair inflation was running nearly 20% earlier in the year.

New technology has helped make damaged vehicles more expensive to fix, Causey says.

“You have cars with cameras in bumpers and cameras in mirrors, and headlight assemblies that are costing sometimes $2,000,” he said. “All that factors into it.“

By agreeing on the 9% increase over two years, Causey and the Rate Bureau avoided what can be a lengthy process. Causey scheduled a hearing for October on the industry’s request, after which he would have had 45 days to approve rate increases. If the industry didn’t like his decision, it could have appealed to the state Court of Appeals and ultimately the state Supreme Court if necessary.

Wheeler thinks Causey should go that route more often, to take a harder line with the industry. But Causey, who has never allowed an insurance rate increase to reach court, says the state Department of Insurance risks losing in court, which would likely result in higher increases for consumers.

As it is, North Carolina residents enjoy among the lowest auto insurance rates in the country. Sources such as Forbes, Bankrate and Marketwatch come up with different numbers for average premiums in each state, but they all rank North Carolina among the 15 lowest.

And rates are rising nationally at a faster rate than in North Carolina. According to the Bureau of Labor Statistics, vehicle insurance rates nationwide were 19.2% higher on average in October than they were a year earlier.

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