North Carolina drivers still pay some of the lowest car insurance premiums in the country. That distinction, however, is getting more expensive to maintain.
A new report from insurance comparison platform Insurify shows average full-coverage auto premiums declined nationally from 2024 to 2025, falling 6% to $2,144 per year. In North Carolina, rates held steady at roughly $1,278 — keeping the state among a small group where annual premiums remain below $1,300.
But stability doesn’t mean stagnation. A 5% rate increase approved by the state insurance commissioner has begun taking effect, nudging costs higher for drivers across the state. Insurers had initially sought a far steeper increase of more than 22%.
Nationwide, car insurance premiums surged 46% between 2022 and 2024, driven in part by what analysts describe as riskier driving behavior in the wake of the pandemic. Elevated claims costs — from more severe crashes to higher repair bills — expanded insurers’ margins. That has allowed many carriers in competitive markets to ease rates slightly this year.
North Carolina’s regulatory structure, however, tends to produce slower, more incremental adjustments.
Insurance Commissioner Mike Causey attributed the latest increase to “distracted driving, excessive speeding and increased automobile repair costs putting upward pressure on insurance rates.”
Even with the bump, the state compares favorably to national averages. According to the American Property Casualty Insurance Association, North Carolina experiences fewer accidents, less severe injury claims and lower levels of attorney involvement and litigation expenses than many other states — factors that help restrain premiums.
Repair economics remain a key variable. Modern vehicles are packed with sensors, cameras and advanced driver-assistance systems that make even minor collisions more expensive to fix. Labor shortages in auto body shops and higher parts costs compound the issue.
Insurers began implementing the approved increase in October. The N.C. Rate Bureau has indicated companies are not currently seeking another rate hike in 2026, though forecasts remain sensitive to broader economic conditions.
Nationally, Insurify projects average premiums will rise modestly this year. Trade policy and tariffs on imported auto parts could complicate that outlook, adding another cost layer to an industry already navigating inflationary pressures.
For North Carolina drivers, the headline remains relatively positive: rates are still low by national standards. But the era of flat premiums appears to be ending, replaced by gradual adjustments tied to the rising cost of getting cars — and drivers — back on the road.
