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N.C. auto insurance rates to drop

Posted September 11, 2008

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— State Insurance Commissioner Jim Long signed an order Thursday requiring a 16.1 percent reduction in automobile insurance rates and a 11.7 percent reduction in motorcycle liability rates.

The new rates will go into effect Jan. 1.

“After listening to testimony from both sides during the rate hearings in July and August, I found that the Rate Bureau’s request for a 12.9 percent increase just wasn’t warranted,” Long said in a statement. “It’s the largest increase they’ve requested in almost 15 years. I was surprised by the request, especially since last year the bureau filed for no change.”

Under state law, the insurance commissioner sets the maximum allowable rate that auto insurance companies can charge in North Carolina. The state has the sixth-lowest auto insurance rates in the nation.

During recent hearings, an attorney for the Department of Insurance argued that the market for auto insurance had not changed significantly since last year, when companies did not seek a rate increase.

Experts with the department said the Rate Bureau, which represents insurers, used faulty calculations when determining the proposed rate increase. For example, the bureau filing included claims arising from the North Carolina Reinsurance Facility, an entity that insures riskier drivers, even though bureau rates don't apply to those drivers.

The Rate Bureau can appeal Long order in court and can raise rates while awaiting the the appeals decision. The difference in the ordered rate and the implemented rate must be held in escrow and refunded to policyholders if the bureau loses its appeal.


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  • mozingotimothy Sep 12, 2008

    Dittos to Commissioner Long for not raising car insurance rates, but instead decreasing the rates in North Carolina. For one thing we do not need higher car insurance rates. WTG Commisioner Long.

  • Andiecat Sep 12, 2008


    Please reread my comment. By law the RF must break even. It files its own rates. Long has never challenged RF rate filings. He did not bury the surcharge. The legislature did. Insurers can not discount RF business, according to the courts. Yes, we all make up the for the clean risks, maybe 2% of your premium. If you had a clean record and were put in the RF and your rates went up 40%, would you like it? That's what would happen without the clean risk law. I did not make your point. For what do you think your premium is paying? Could it be other person's driving mistakes? It's not like whole life insurance where you get a cash buildup. It's like term life insurance, pure protection. If you didn't have liability insurance and injured or killed another person through your negligence, there go your assets. Also, drivers with moving traffic violation convictions or who are at fault for accidents pay more. They're not getting a free ride.

  • kal Sep 12, 2008

    Maybe people caught driving without insurance/licenses should have steeper fines to help those of use who do things LEGALLY offset the cost of our insurance.

  • jsanders Sep 11, 2008

    NC's auto insurance system is a byzantine mess of socialist assumption; consumers here could save as much money and have much more choice if we had systems similar to neighboring states':

  • FE Sep 11, 2008

    I recently had an interesting talk with my insurance company, which shall remain unnamed.

    The very helpful person was telling me how as a policyholder I could get a DISCOUNT for having a "good" student in college, another discount for college being more than 100 miles away, another discount for having side airbags, and another discount for having daytime running lights. I think there were others on the list...

    When I asked why this was "news to me" she said she better first check on my STATE coverage. When she went to NC on her computer, she muttered something like "I can't believe this!!"

    Essentially, although the insurance COMPANY offers such discounts to its drivers, North Carolina does NOT allow any such rate discounts on policies of residents.

    And, as others have mentioned, we ALL are paying extra to help insure thus "uninsurable" bad drivers!

    SO....I take this "rate drop" news with a very large grain of salt....


  • NeverSurrender Sep 11, 2008

    "My daughter has had 2 speeding tickets and 2 accidents within 2 years. Now, as a parent, I've done everything up to take the car away completely."


    Why didn't you pull the keys after the second ticket?

    If I was lucky, I might have gotten one mulligan. The second ticket and/or accident, then it was my problem to buy a car, fill it with gas, pay for maintenance and insurance.

    I'm thinking that if your daughter is anything like the average teenager out there, she'd lose mucho face in front of her mates by having to constantly bum rides or go public transit when she used to drive herself to wherever she wished.

    As for the "threat", good luck on that working. More than likely, she'd take the keys and title and cheerfully drive without the insurance until either the laws of man or the laws of physics caught up with her.

    The lawyers and courts just might take the view that as long as she doesn't kill someone, she's a dependable revenue stream that's quite profitable.

  • donnied1952 Sep 11, 2008

    YEAH for Jim Long!!! He has always stood up for the people of North Carolina. Wish I could say the same for our governor.

  • Tidbit Sep 11, 2008

    I can agree with that. But let me give an example of my thinking.

    My daughter has had 2 speeding tickets and 2 accidents within 2 years.
    Now, as a parent, I've done everything up to take the car away completely. NOw that she's 18, and has gotten another speeding ticket, I know what the ultimate consequence is that she is going to have to do to understand the consequences of her beahvior. ...
    I'm turning the title to her - in her name, which goes the registration and all. And she is going to have to pay through the nose on her own.

    Now this consequence would be much more effective if she actually had to pay through the nose. If she had to pay $300-$400 a month for insurance with the threat of not being covered - or actually losing it. It might be the 1 thing that finally teaches her a lesson.

    All that's being taught to her now is, eh - it's no big deal. Someone will cover me .. I don't have to worry.

  • NeverSurrender Sep 11, 2008

    "Right now, NON-risky drivers pay a MUCH higher premium, to put the funds into a pool, to subsidize (YES SUBSIDIZE) "risky insurers" who can't get insurance."


    At least with the high-risk reinsurance pool, there is at least a chance of getting some of the high-risk insured's money in the pot to pay for their reckless behaviour.

    The alternative, they'd drive without insurance anyway and drive up utilisation under the underinsured/uninsured policy provisions. Guess what happens to the base rates if that suddenly becomes far more costly for the insurers?

    You're screwed if you do and screwed if you don't...and that's probably never going to change.

  • Tidbit Sep 11, 2008

    As the saying goes: If you want to live like a Republican, vote like a Democrat. Jim Long is a long standing Democrat, but alas, he set to retire.

    I appreciate the fact that this state stands up for its citizens and says "no" to big business.
    Lone Voice in the Wilderness

    yeah - leave it to a Democrat to rob from the middle class to give to the poor - because that is all the Jim Long did.

    He didn't stand up to big business.... he put a government entity in a place it didn't belong and how we have another "big business and a big brother" working together