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Apodaca has a better idea on auto insurance

Published: Mar. 10, 2013
The complete article can be found here: Asheville Citizen-Times

Finally, someone has proposed changes to North Carolina’s auto insurance system that might actually benefit drivers and not just insurers. North Carolina has a model system for two reasons. First, proposed rate changes must be industrywide and can be challenged by the Department of Insurance. Insurers can charge less than the rate set by law but not more. Second, a reinsurance pool assures that all licensed drivers have access to insurance they can afford.

North Carolina rates are the lowest in the South and either the fifth- or eighth-lowest in the nation, depending on which survey you use. Rates have fallen 3 percent since 2006. Why would anyone want to mess with a system that works so well? The insurers and associations banded together as Fair Automobile Insurance Rates, who criticize both the rate system and the reinsurance pool, say they want to help the consumer. In fact, the only logical result of their efforts would be to increase rates and insurer profits.

That’s not to say the system could not use tweaks. Two that seem sensible have been introduced by Hendersonville Republican Tom Apodaca, who chairs the Senate Rules Committee. One allows certain add-ons to be exempt from the rate-control system. The other specifies that the age of a young driver may be a factor in setting rates. The add-ons include such things as deductibles that decrease each year of safe driving, coverage that replaces a wrecked car with a newer one and pet travel coverage. Rates still must be vetted by the commissioner of insurance to make sure they are based on sound actuarial principles, and no add-on may be required for continued coverage.

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