Local Politics

Proposal Would Give Auto Insurers Rate Control

Posted April 9, 2008

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— A legislative committee is expected to discuss a proposal Thursday that critics say could hike some auto insurance rates as much as 20 percent a year.

The proposed legislation would allow insurance companies to set their own rates instead of having the state commissioner of insurance do it, as happens now.

North Carolina has the sixth-lowest rates for auto insurance in the nation, with drivers paying an average of $602 a year. Those who oppose the drafted bill say that could change if insurance companies get more control.

"The only way to look at this is to see higher rates for drivers, more profits for insurance companies, less power for the people," said Chrissy Pearson with the state Department of Insurance.

Sen. Tony Rand, D-Cumberland, countered that the current system is unfair, with all drivers paying a surcharge that funds a coverage pool for risky drivers.

"There are many ways to look at this," Rand said. "One way is that it would be lower rates for some people who don't have to subsidize. What we're trying to do is get the subsidy out of this."

"This is very easy to make a lot of trite statements about 'we're protecting people.' But this is a very difficult problem to try to get straight," Rand added.

New Jersey has the nation's highest average premium, $1,184, followed by Washington, D.C., drivers paying $1,183. Drivers in New York, Massachusetts, Louisiana, Florida, Rhode Island and Delaware all pay more than $1,000 a year on average.

The Joint Study Committee on Automobile Insurance Modernization will likely only discuss the proposed bill Thursday. Rand said he is not sure whether the panel will vote on it.


This story is closed for comments.

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  • beth Apr 10, 2008

    That's the worst proposal I've seen in a long time. We should all let Tony Rand know how we feel about this.

  • NMBound Apr 10, 2008

    It is important that everyone understands that insurance companies are not out to "steal money" from anyone or not pay them for what they are owed. The problem comes from those who defraud the insurance companies, which means that they are defrauding each of you out of your money. I see it almost daily, where someone fakes their damages or injuries. You may think that you are getting away with it, but what you are actually doing is helping raise the rates. The insurance markets are currently seeing an increase in claims and that is because either people are not paying attention or they are trying to defraud the insurance companies. I am sure that a lot of it has to do with the economy, but it makes it worse not better. If the insurance companies raise rates it is to compensate for the extra losses being claimed. Don't think for a second that they are immune to losing money, I have many friends who have lost their jobs because the ins. companies are cutting expenses.

  • Realthoughts Apr 10, 2008

    I think we all need to email Mr. Rand and let him and his office and let him know how we feel about his proposed bill.

    Tony Rand...... Tonyr@ncleg.net.

    I'm sure he wants to know what the people think.

  • 48ladybug Apr 10, 2008

    Oh my gosh - help us all if the insurance companies control our rates. What's this "average of $602" or whatever it was in the article. Evidentially they haven't seen my policy - $4299 a year - yes that includes an "inexperienced driver" but still that's ridicilous.

  • testing2005 Apr 10, 2008

    If we want to have a free market as Steve said - remove the mandatory insurance in addition to allowing insurance companies to dictate the price. If insurance companies face the fact that a lot of people choose not to have car insurance (or tractor, boat and others they drive once a month), they will be begging us to have a car insurance. We are already paying uninsured and underinsured fees, so why not go all the way and let the free market go?

    As many of you said before – GREED doesn’t co-exist with free market.

  • blueridgerunner Apr 10, 2008

    "Sen. Tony Rand, D-Cumberland, countered that the current system is unfair, with all drivers paying a surcharge that funds a coverage pool for risky drivers."

    Sen. Tony Rand, is not doing the citizens of NC any favors by pushing this proposal. But he is doing the Insurance Industry a great favor. Apparently we need to be looking more closely at how Sen Rand will personally benefit. We're already paying cheaper rates and I'm perfectly satisfied to have the Auto Insurance Industry regulated as long as we continue in that direction.

    Why isn't Sen Rand looking into reducing our Health Insurance rates instead for raising our car insurance premiums?

    Rand's not looking after the people of NC that's for sure. We need to do more house cleaning in the State Legislative body to rid ourselves of the Rands and Basnights still making poor decisions concerning the every day citizen.

  • iwideopen Apr 10, 2008

    Unbelievable !!! The insurance companies are gonna raise rates big time. You know what, instead of buying that new car I have been thinking about, I think that I will just keep my old clunker.

  • Raptor06 Apr 10, 2008

    Do you REALLY think we will receive lower rates from the insurance companies? Their lobbyists must be working overtime to kickoff this great deception. They say they will lower the rates for good drivers...what's their definition of a "good driver?" It may be totally different from ours. Does anyone remember how Enron ripped of its customers in California? They promised lower rates, too!

  • bosoxbaby Apr 10, 2008

    Amen crick!!! A lot of people don't realize that insurance isn't a get rich quick deal. It's designed to put you back at the place you were before you had the loss...or at least as close to it as possible. Homeowners insurance works the same way folks so don't think if your house burns down that the insurance company will give you more than what it's worth!! Insurance, also, isn't designed to cover EVERYTHING under the sun so be careful what you buy and READ YOUR POLICY!!!

  • crick127 Apr 10, 2008

    gt705, I am an insurance adjuster, and what you just stated is actually against the law. We are not trained to pay out the least amount. We are trained to pay out the fair amount. Most people think that they are going to get what a dealer charges for a vehicle, however by law the insurance company will only pay the actual cash value of the car, which is usually somewhere around what you can get the car for from an individual.