As gas prices continue to skyrocket, your car insurance rates could also increase beginning this fall.

In mid-May, Governor Sonny Perdue signed Senate Bill 276, a portion of which allows insurers to set their own rates without "prior approval" from the state insurance commissioner.

Opponents of the law say motorists' rates could increase up to 20 percent.

"I think that's a very realistic figure," Insurance Commissioner John Oxendine said. "What the dollar effect will be and how much the rates will go up, there's really no way to tell. It could potentially become a very serious problem."

Julie Pulliam, the public affairs director for the American Insurance Association's Southeast division, said that in other states where similar legislation has passed, rates decreased.

She pointed to South Carolina's industry reform in 1995 as "a remarkable turnaround."

"In most states you see premiums decreasing. I'm not aware that a 20 percent increase has occurred in those other states," Ms. Pulliam said.

The new legislation should attract more insurers to Georgia, which should benefit consumers through competition. Ms. Pulliam said she believes rates should remain steady or decrease for most drivers.

Under the law, Mr. Oxendine, who plans to run for governor in 2010, can set minimum mandatory liability coverage rates, which impacts only seven to eight percent of drivers.

Mr. Oxendine said he expects consumers to "see the impact" of the bill at the beginning of next year.

Allison Wall, the executive director of Georgia Watch, a consumer watchdog group, disagrees with the commissioner's predictions.

"I believe that we're going to have to wait and see. You have to think about the marketplace in Georgia. You can't just assume the worse," Ms. Wall said.

She said Georgia has more than 200 carriers and has the fourth-cheapest auto insurance rates in the Southeast.

"When you have hundreds of companies competing with each other for the same group of consumers with the same product, it would be suicide for them to jack up their rates," she said.

The recent changes would allow new products, such as flexible coverage, to reach the Georgia insurance market. In the past, customers have not had access to some options because insurers didn't want to jump through regulatory hoops.

However, she recommends consumers shop around to find the best rates if prices start to increase.

Georgia Watch is monitoring the situation and will address the issue with the state legislature if rates skyrocket, she said.

Gould Hagler, the executive director of the Independent Insurance Agents of Georgia, said the legislation allows companies to change rates with "less red tape." They can implement changes immediately "when market conditions indicate."

Mr. Hagler said that some consumers could actually see a decrease in rates.

"We're not in a situation in which companies are losing money or have to increase rates dramatically in order to get an adequate rate," he said. "That gives me confidence that we won't see significant rate increases."