North Carolina insurance companies have requested a statewide average increase of 22.6% in automobile insurance rates, according to the North Carolina Department of Insurance. 

The request was made through the North Carolina Rate Bureau, which represents vehicle insurance companies, according to the release. The companies are requesting the rates take effect Oct. 1. 

According to the release, the commissioner of insurance has 60 days to review the rate request to determine if it’s justified based on the data submitted. If the commissioner does not agree with the increase, he can negotiate a settlement or call for a hearing. 

“Settlements have been reached on automobile rate filings in the past,” the release says. “If the case goes to a hearing, a hearing officer would make a ruling on the request. This rate filing follows a February 2023 filing in which the insurance companies requested a statewide 28.4% increase. That filing resulted in a settlement of an overall average 4.5% increase per year for two years.” 

Auto insurance has continued to increase across the nation at rates higher than inflation. According to the most recent Consumer Price Index Summary from the Bureau of Labor Statistics, motor vehicle insurance increased 11.3% in the past year. 

Last year, insurance costs hit record levels. The average annual premium was $2,543, up 26% from 2023, according to J.D. Power.

ValuePenguin predicts drivers will pay an average of 7.5% more this year for auto insurance as the new year kicked off with an average nationwide monthly premium of $175 for full coverage. Nevada, Florida, and Michigan premiums are the highest at more than $250 a month, according to ValuePenguin’s “State of Auto Insurance in 2025” report.

In California, State Farm is asking for an immediate 22% increase to its homeowners insurance rate, claiming the wildfires in the state are the costliest disaster in the history of the company, according to a press release. 

The company says it has received 8,700 claims and already paid out more than $1 billion to customers. 

“Capital is necessary so an insurance company can pay for any future claims for the risks it insures,” the release says. “Last year, one rating agency downgraded State Farm General’s financial strength rating due to its capital position. With further capital deterioration as a result of the wildfires, additional downgrades could follow. If that were to happen, customers with a mortgage might not be able to use State Farm General insurance on the collateral backing for their mortgage.”

According to USA Today, the insurance company has a history of claiming financial distress while asking for rate hikes in California, including three requests for extraordinary “relief” last June. 

“State Farm General’s rate filings raise serious questions about its financial condition,” said Gabriel Sanchez, press secretary for the California Department of Insurance, in an email to USA Today.

Doug Heller, the director of insurance for the Consumer Federation of America, told USA Today that he felt the company has been profitable in California in recent years. 

“They have built up an incredible fortune in order to deal with crisis,” Heller told the newspaper. ”If they feel that they are going to need rate hikes in the future, they have a right to go through the process, but to be putting on the emergency siren seems more like trying to bully the state into handing over cash while we’re trying to recover from disaster.”

IMAGES

Photo courtesy of ThitareeSarmkasat/iStock