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Auto insurance proposals raise commissioner's ire

Posted April 11, 2011
Updated April 12, 2011

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— State Insurance Commissioner Wayne Goodwin on Monday came out against three proposals to do away with North Carolina’s system for setting auto insurance rates, saying consumers would suffer.

Senate Bill 490 would strip Goodwin's authority to set a cap on auto insurance rates and to determine if rates are excessive. He said the bill also would allow insurance companies to raise rates with no prior approval from the state Department of Insurance and allow them to charge drivers more, regardless of their driving records.

Two companion bills – House Bill 834 and Senate Bill 477 – also would allow higher rates for "clean risk" drivers, he said.

"The insurance companies call it auto rate modernization. Well, if making rates skyrocket is modern, then you can just call me old-fashioned," Goodwin said at a news conference.

Sen. Bob Rucho, R-Mecklenburg, said Senate Bill 490 is an attempt to modernize an antiquated system that allows drivers to benefit from competition between the insurance companies. He said his bill would reward good drivers, and only bad drivers might see rate increases.

The sponsors of the other two bills couldn't be reached Monday for comment.

Nationwide Insurance issued a statement Tuesday, urging caution in any changes to North Carolina's system.

"Nationwide believes the rate system in North Carolina works well and that there is simply no crisis to address," the company said in the statement. "Any dramatic dismantling of our current auto insurance ratemaking system should be considered with great caution to assure that customers benefit and do not suffer unintended negative consequences."

North Carolina has the lowest auto insurance rates in the Southeast and the eighth-lowest rates nationwide, Goodwin said. The DOI hasn't approved an auto rate increase in more than 15 years, and last year, he ordered Allstate to issue refunds after determining that the insurer had overcharged policyholders.

The ability to order refunds also would be stripped from the DOI under the proposals, Goodwin said.

“(The bills) are pushed by out-of-state insurance companies who want to make dramatic changes to our state’s insurance system – a system that, quite frankly, is working fine," he said. "The bottom line here is this, insurance companies want more of your money. These proposals will no doubt lead to higher car insurance rates."

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  • chapelthrill22 Apr 15, 2011

    I asked my agent and I'm paying $40 per year to subsidize the bad drivers! That is ridiculous! It is personal responsibility, people ---- personal responsibility!

  • chevybelair57sd Apr 12, 2011

    Maybe the insurance company Execs need to consort with the property tax evaluation people, they sure seem to get higher rates no matter the market

  • Blaster Apr 12, 2011

    Oh come on now all you state employee haters. This is just your "private sector" seeking to do what is best . . . for their bank accounts!

  • 6079 SMITH W Apr 12, 2011

    ONLY two? Pull the other one..............;)

  • dougn2unc Apr 12, 2011

    Maybe some of you should check out South Carolina - a totally free competition of insurers. The good, low risk drivers are winning, not so much for the high risk drivers. Fair is fair. Check it for yourself. In NC, over 1.5 million drivers are in the high risk pool. In SC, just 2. I wonder whose system isn't really working?

  • NRaleighDude Apr 12, 2011

    Wow..A politician that isn’t in the pockets of big industry. It is sad that seeing an elected official with backbone is rare today. I guess Goodwin will be the only Democrat that I vote for next year.

  • 6079 SMITH W Apr 12, 2011

    By George, you're RIGHT! Thanks for the insight....from now on, we'll actually believe the nice lady on the "AMERICAN PETROLEUM INSTITUTE" talking point adverts on the telly, too. I'll admit, I thought that was hogwash too, but now I see the light....;)

  • explorerford Apr 12, 2011

    No Sarah, no oversight means higher rates for us all with no recourse. Think about who is lobbying for this. Do you think the Big Insurance are lobbying for this bill so that they can make less money? Be realistic. This General Assembly is bought and paid for by Corporate Intrests.

  • Jim Britt Apr 12, 2011

    Insurance corporations are NOT going to compete to see who gives NC drivers the lowest rate but isn't it good to see that the insurance corporations have such good representation in the NC legislature. Wouldn't it be wonderful if the people had such good representation?

  • sarahbellum Apr 12, 2011

    let me get this straight. The state's largest auto insurer is actually the govt Reinsurance Facility. They have done so well capping (fixing) the rates on bad drivers, they they have to surcharge all the good drivers in the state because they are not able to cover losses. Then it is such a good deal that they make it a law that it cant even be disclosed because too many questions were asked by us consumers. If it is such a good deal here in NC, why are we the only state using such a system? I dont think its fair to charge good drivers more than necessary to fund high risk drivers. Using same argument, I suppose you are okay with us being surcharged to pay for million dollar homes at the beach for home insurance. I'm not! It's too bad many of you fail to grasp simple economics. More competition means lower rates.

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