A refund from automobile insurers that charged up to 9.4 percent premiums since January could make some local drivers happy, but officials say it could take months to determine who is eligible.

A settlement denied the rate hike on Wednesday sought by the N.C. Rate Bureau, which represents 114 auto insurers, and instead reduced rates by one-half percent.

Refunds will be issued to policyholders across the state after insurers were allowed to charge drivers up to the 9.4 percent premiums as of January while rates were being appealed by former insurance commissioner Jim Long, who died Feb. 2.

An additional 1.4 percent rate increase that insurers sought earlier this year also was cancelled, dropping rates to 2006 levels and freezing them until 2011.

Johanna Royo, spokesperson for the N.C. Department of Insurance, said refund checks would be dispersed beginning May 2010.

She said insurers wouldn't know immediately who was eligible to receive a refund.

"We're talking about 1 million policy holders. It will take a while to determine exactly who will be getting refunds. Then, the information will trickle down to a person's local agent," she said.

Drivers in the area supported the insurance refunds, especially with the current recession.

"A refund would be great. Any extra income is a blessing," said Lynn Parson, who noted that she drove from Greensboro to High Point just to buy cheaper gas on Friday.

Marla Knowles said drivers deserved the refunds after being charged high premiums.

"I think they should give us a refund. I would use it to pay bills if I got one," she said.

Douglas Smith, a Nationwide insurance agent and owner of the Douglas Smith Agency in Archdale, said proposed rate increases are usually cut by small amounts, but the drastic slash and lack of an increase could hurt the business.

"It's good news that the matter is settled. It's bad news that the rate isn't as high as the bureau proposed," he said.

Smith, who has been with nationwide since 1973, said he had seen the insurance business survive slashed rates in the past.

"This is just another opportunity for us to be in contact with our customers on a positive note. Any time you can be in contact with them on a positive note right now, it's encouraging," he said.

The Associated Press contributed to this article.