Commissioner: Insurance bill could lead to higher rates

Posted February 28, 2013

— Insurance Commissioner Wayne Goodwin says even good drivers could see their auto insurance rates go up under a bill filed in the state Senate Thursday.

An industry group counters, saying it would let insurance companies offer innovative products that lower rates.

Currently, companies that sell auto insurance in North Carolina have to set their maximum possible rates through the North Carolina Rate Bureau. They can set lower rates but are not allowed to charge more than the ceiling. 

Senate Bill 154, filed by Sen. Wesley Meredith, R-Cumberland, would allow companies to opt out of that process. 

“North Carolina drivers will benefit from a more competitive, free-market system that reduces bureaucracy and eliminates unnecessary costs,” Meredith said in a news release put out by the industry group pushing for the changes.

The group, Fair NC Rates, is backed by State Farm, Allstate, Geico and Progressive. Representatives of the group say the bill would clear the way for insurers like Progressive to offer discount programs like "Snapshot," which bases insurance rates by monitoring of how policyholders drive. 

Still, not all companies back the bill, and Goodwin said it would bad for consumers.

"This bill will have a devastating effect on North Carolina drivers," Goodwin said.

Insurers could raise rates by up to 12 percent a year on average without going through any sort of regulatory review, he said.

"This bill will lead to people paying more for automobile insurance," he said. "It does not preserve my ability to review car insurance rates."

Particularly troubling, he said, is the measure would allow rates to rise on good drivers as well as bad ones.

But insurance companies say that customers will actually save money in the long run. 

“Our independent agents want to be able to offer their clients the same innovative and cost saving products that all 49 other states offer to their citizens, and fully support changing this out-of-date, archaic system of pricing auto insurance,” said Kelley Erstine, chief executive of the Independent Insurance Agents of North Carolina.


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  • HeadsUp Mar 4, 2013

    I asked somebody who knows about this bill, and he said N.C. already has just about the lowest insurance rates in the country. This looks like a smokescreen to RAISE rates.

    Otherwise, why get rid of the elected Commissioner's ability to approve or reject higher rates?

    And why would State Farm, Allstate, Geico, and Progressive spend all this money and effort to reduce what they charge us?

    I have relatives in other states nearby, Georgia and Virginia, and they pay a good bit more than I do for car insurance. I wouldn't want to switch places with them, I'll tell you that!

  • IndependentAmerican Mar 1, 2013

    "...a news release put out by the industry group pushing for the changes.
    The group, Fair NC Rates, is backed by State Farm, Allstate, Geico and Progressive."
    Follow the money. How much did this group 'donate' to Sen. Wesley Meredith, R-Cumberland

  • b4reelnow Mar 1, 2013

    I guest everyone will feel this one! While I don' t agree with raising a rate of any kind during this sour economy, maybe people will start paying more attention to how they are driving. Oh wait, you may have inexperienced children and or grandchildren that are on the highways, just imagine how much you would have to pay...... just for liability insurance. WOW!!!!!

  • tracmister Mar 1, 2013

    Think! If the major insurance companies are for it, it means more money in their pockets and less in yours. This is becoming ridiculous. We have pay raises for political members in state government, probable raises on insurance rates; but not one new bill to try to produce jobs in this state.

  • rosannedisney Feb 28, 2013

    Jobs, jobs, jobs.

  • sarahbellum Feb 28, 2013

    As a former agent who’s followed this, I think it’ll be beneficial – most importantly for customers. The current system isnt working. I’ve had to explain countless times to customers why a guy with just 1 accident in 20 yrs has to be surcharged, yet a guy who’s had 9 tickets in 12 years, can theoretically get a clean driving discount. Fair?
    Everyone pays an additional undisclosed amount (by law) to subsidize the high risk drivers & their accidents. From what I see, it lets InsCos still choose between the current system, & one more like 49 other states. If companies that stay on the current system are going to have lower rates than what Goodwin is proposing, people are smart enough to figure this out by shopping around. Seriously, are you not going to shop around if your company jacks your rate every year 10%? Companies would price themselves out of business by losing customers, or be forced to reduce rates. Market forces at work, really.

  • fedora Feb 28, 2013

    Has anybody else noticed how expensive it's going to be having Pat as governor, I don't think the republican voters expected all the changes to cost them so much money. Their are going to be unemployed republicans, their are going to be republicans who's utility bills go up, now the auto insurance is going up. I bet most incomes do not go up at all.

  • timtooltime777 Feb 28, 2013

    Fix the bill and resubmit it to the house !!!!!

  • oldaltar Feb 28, 2013

    Any doubt now concerning the republicans game plan.