Deal clears road for average 2 percent auto insurance rise

In this Thursday, July 9, 2015 photo, motorists drive on Grand River Boulevard in Detroit. It’s called driving dirty and city officials estimate that one out of every two motorists living in Detroit is taking to the road without any type of auto insurance coverage. Data from shows the top 25 zip codes in the United States where drivers pay the most for car insurance are in Detroit, with some policies topping $5,000 annually. (AP Photo/Paul Sancya)

RALEIGH, N.C. (AP) — North Carolina’s insurance regulator says he’s reached a deal with auto insurers for a premium increase of just over 2 percent instead of the nearly 14 percent average increase companies sought in February.

The state Insurance Department said Thursday the new rates will become effective with policies signed after October 1 and will stay in effect for two years.

Insurance Commissioner Mike Causey says the agreed average increase of 2.2 percent meant North Carolina consumers would spend more than $1 billion less over two years than the auto insurance companies initially wanted.

Causey said in March the proposed auto insurance rate increase requested by a group representing the industry was not justified. That set up an administrative hearing planned for September, when a hearing officer could listen to both sides.