1 Million N.C. Drivers to Get Refunds

Jul. 16--RALEIGH -- North Carolina drivers are about to get refunds and rate reductions on their car insurance, state Insurance Commissioner Wayne Goodwin said Wednesday.

In a news release, Goodwin said he negotiated the reduction to settle a lawsuit with the insurance industry over prices.

About 1 million customers will get an average refund of $50, said spokeswoman Johanna Royo of Goodwin's office.

Some, Royo said, won't get checks.

"The good news for them is they've already been enjoying a lower rate," she said.

Between now and late 2011, car insurance customers will save about $545 million, Royo said.

According to a chart of sample insurance costs for Cumberland County, the owner of a 2008 Ford Taurus paying almost $1,200 per year will save more than $100 annually with this settlement. The industry's prices are regulated in North Carolina.

The settlement is with the North Carolina Rate Bureau, which represents more than 100 insurance companies.

In 2008, the insurance companies asked for a 12.9 percent increase. Former Insurance Commissioner Jim Long denied the request and instead ordered a price cut.

The industry appealed, and while the appeal was pending in court, it was granted a 9.4 percent increase.

Insurance companies didn't have to raise their prices that much, but they could, Hoya said.

Wednesday's settlement deletes that increase and reduces rates another 0.5 percent, lowering the maximum prices below what they were in 2006, Hoya said.

Under the settlement, the industry can't seek a new rate increase until 2011.

Of the 3.8 million policyholders in North Carolina, about 1 million are eligible for refunds of varying amounts, Royo said.

Goodwin said the agreement caps auto insurance rates for the period of 2006 to 2011. The rate bureau cannot file for another increase until 2011.

"In this economy, every dollar counts," Goodwin said, "and I am committed to protecting consumers through fair rate-making."

Staff writer Paul Woolverton can be reached at woolvertonp@fayobserver.com, (919) 828-7641 or 486-3512.