Inexperienced North Carolina drivers will pay more for car insurance under new law
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Many drivers across North Carolina will begin paying more for car insurance starting this month after a new state law took effect.
Why it matters: The law, passed last year by the General Assembly, extends how long new drivers pay a surcharge on insurance from three years to eight and doubles the minimum liability limits of the cheapest policies, according to the Department of Insurance.
- It would also change how long insurance companies can consider speeding infractions on a driver's record.
Reality check: North Carolina still has some of the lowest car insurance costs in the country, but the law could bring significant increases for some drivers.
Driving the news: Mike Causey, the state's Insurance Commissioner, said he's heard from many families concerned about rising costs for young drivers in the state and was initially against the measure.
- But he now thinks the law will help stabilize the state's insurance market. The surcharge, he added, also decreases significantly after year three, but only if the inexperienced driver has no infractions.
- "We believe it will be better in the long run for all drivers," Causey told Axios.
Between the lines: Causey's office helps negotiate insurance rates in the state, but was not part of creating the legislation that was passed last year.
What they're saying: Causey said several factors are pushing higher costs for insurance, including inflation on car prices, car repairs becoming more expensive, increased speeding and distracted driving after the pandemic and too many people driving without insurance.
- He also believes a shortage of state troopers and police officers is, in part, leading to more dangerous driving on the state's roads.
- "My first priority is to protect consumers and make sure that the insurance companies are treating consumers fairly," Causey said. "But at the same time, we have to make sure that insurance companies just don't pick up and pull out of the state."
Zoom in: Here are the changes that are going into effect:
- The minimum liability limits of $30,000 per person and $60,000 per accident for bodily injury will increase to $50,000 per person and $100,000 per accident.
- The number of years a driver will be considered inexperienced increases from three years to eight. That means a driver who gets their license at 16 can be charged an inexperienced driver surcharge now until they are 24. (The changes only apply to those who got their license after July 1.)
- The law also extends how long insurance companies can charge a driver convicted of speeding infractions worth four or more insurance points from three years to five years.
- Before July 1, insurance companies could not raise premiums for drivers convicted of speeding 10 miles per hour or less over the speed limit, as long as the driver had no moving violations in the preceding three years. The look-back period is now extended to five years under the new law.
What's next: Car insurance rates are expected to increase by 5% on average for new and renewed policies in the state in October.
- Car insurance companies were pushing for an increase of 23%, but the state's Insurance Department negotiated the hike down.