Motorists in North Carolina now have something to be happy about. In the recent developments over the negotiations between the state government and insurance companies, over one millions drivers will be getting refunds.
That’s not all the good news. Motorists can also expect lower premium rates until 2011, state officials say. With the rising unemployment rate and no end in sight yet for the economic recession, many Americans are looking for new ways to cut back on expenses and maximize savings.
Wayne Goodwin, North Carolina’s Insurance Commissioner, says that as part of the settlement with the North Carolina Rate Bureau, motorists will get refunds of $50 on average. However, some drivers may not receive any refunds at all, Goodwin adds. Policyholders can also see total savings of up to $545 million between this year and 2011, according to the insurance commissioner.
The North Carolina Rate Bureau represents more than 100 auto insurance companies. It is widely recognized by many as the largest group of insurance providers in the state. The group has sought higher rates in the past.
The state government regulates car insurance rates in North Carolina. Last year, insurance providers clamored for a 12.9 percent hike but were denied. Instead, the State Insurance Commissioner of that time, Jim Long, ordered a rate cut. Industry players appealed the order and took the matter to court. Before a decision was reached, however, a 9.4 percent increase was granted.
Johana Royo, a representative from the State Insurance Commissioner’s office, said that companies did not have to raise their rates that high. The latest round of settlements cancels the 9.4 percent hike and instead provides for a 0.5 percent reduction in insurance rates. The maximum premiums this year are lower than those in 2006.
The settlement also prohibits any rate increases until 2011. State officials add that because of the agreements, some 1 million drivers can avail of refunds whose amounts may vary. There are an estimate 3.8 million policyholders in the state of North Carolina, experts say.
Royo also adds that the settlement puts a hold on any car insurance rate increases for the period between 2006 and 2011. State officials have indicated the desire to provide fair rates for consumers as one of the main reasons for the rate hike cap.
A typical policyholder can shave some $100 off premiums annually. This amount can lead to huge savings in the end, officials contend.