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Proposed changes to car insurance law could end up costing drivers more

Published: Mar. 16, 2013
The complete article can be found here: Wilmington StarNews

North Carolina drivers already enjoy some of the lowest automobile insurance rates in the country. A group of lawmakers say their bill will save consumers money, but that claim may be very misleading if experience in other states is any indication. The promise sounds appealing – reduce auto insurance regulations so that insurers can offer good drivers the very best deals on insurance, and they will no longer have to subsidize bad drivers. Except: It doesn’t tell the whole story.

Senate Bill 154, which has a companion bill in the House, would also eliminate the state insurance commissioner’s ability to set rates, for the most part. Auto insurers would be able to raise rates as long as the “aggregate” increase is under 12 percent. In exchange, insurers would have more flexibility to offer creative discounts not currently available here. Similar legislation was attempted two years ago and would have tied the commissioner’s hands on any rate hike of less than 15 percent.

The bill has the support of some major insurers, including Allstate and State Farm. They argue that prices will stay low because of increased competition. But opponents include other entities that offer insurance, such as Nationwide, N.C. Farm Bureau, AARP, AAA Insurance and some agents’ groups. Their argument, and it’s a good one, is that insurance rates are already lower than in most states. Average auto insurance rates are the lowest in the Southeast and the seventh lowest in the United States, according to the National Association of Insurance Commissioners. About 160 companies currently write auto insurance policies in North Carolina.

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