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Large, Out-of-State Insurers Want to Raise North Carolina’s Auto Insurance Rates

Did you know North Carolina’s average auto insurance cost is the lowest in the country? Studies by NerdWallet and from 2014-2018 rank North Carolina with the lowest auto insurance rates in the country. According to The Zebra, the average North Carolinian pays 40% below the national average. The average American is paying $1,427 for car insurance coverage in 2018
North Carolina is the least expensive state with an average rate of $865.

North Carolina’s auto insurance system was created nearly 50 years ago to ensure all drivers are able to purchase affordable liability insurance. The system prevents extreme rate hikes and allows drivers to comparison shop between different insurers.

Under current law, the Commissioner of Insurance sets the maximum auto insurance rates and auto insurance companies are allowed to discount their prices. North Carolina has a robust, competitive market with more than 150 companies competing for your business and more than 2,000 different discounts approved by the Commissioner of Insurance.

A group of big insurance companies are lobbying the North Carolina General Assembly to deregulate the current automobile regulatory ratemaking system so they can set their own rates.

Large, out-of-state insurers are seeking authority to increase auto rates without prior approval of the North Carolina Commissioner of Insurance.

Low Rates NC, a coalition of consumer-minded auto insurers, stands united to oppose any legislation that would destabilize North Carolina’s highly competitive, low-cost system.

Case Study: South Carolina’s Deregulation

Big insurers picked a similar fight in South Carolina in the 1990s and won legislative approval to deregulate auto insurance. Their claims of reducing costs and expanding coverage proved wrong, as the changes to the Palmetto State’s auto insurance system have resulted in drivers paying nearly 40% more than before the law changed.

South Carolina drivers on average page $496 more than North Carolina drivers.

The Insurance Journal summed up the consequences of South Carolina’s deregulation bill in an article posted five years after the law went into effect. “Insurance rates for drivers in South Carolina have been rising faster than the national average, according to a new report. … The figures suggest that a 1999 deregulation law meant to spur competition and keep price increases down isn’t working.”

Don’t let this happen in North Carolina!

Read: Insurance Journal – S.C. Insurance Rates Outpace U.S. Despite 1999 Deregulation Law

What can I do to prevent rate hikes?

The North Carolina legislature has the authority to pass laws impacting automobile insurance. It’s helpful to let your legislators know that you support the current system that protects low auto insurance rates. If legislation that deregulates the auto insurance market is introduced, contact your representatives in the North Carolina House and Senate, calling on them to oppose changes to our auto insurance system.

North Carolina’s auto insurance system…

The North Carolina General Assembly, the North Carolina Rate Bureau and the North Carolina Department of Insurance all have a role in the state’s auto insurance system. By law, they work together to ensure that “rates shall not be excessive, inadequate, or unfairly discriminatory.”

The North Carolina General Assembly decides how insurance is regulated. Legislators have the authority to pass laws impacting automobile insurance including how auto insurance rates are set.

The North Carolina Rate Bureau files changes in auto rates on behalf of all member companies and the Commissioner of Insurance is responsible for approving, disapproving or negotiating final rates.

All 152 of North Carolina’s auto insurers are members of the Rate Bureau. The Bureau does two things: 1) Proposes an industry-wide maximum rate to the Commissioner of Insurance, who is elected statewide every four years; and 2) Establishes uniform policy forms, which enables consumers to apples to apples comparison-shop among insurers.

Annually, the Bureau proposes industry-wide maximum rates for auto insurance, which the elected Commissioner of Insurance reviews, based on the insurers’ reported claims, premiums, expenses and profits. The elected commissioner may accept, reduce, or reject proposed rate increases. Meanwhile, under current state law, all auto insurers compete for customers by offering discounts below the maximum rate, which the Commissioner approves. There is no impediment to reducing prices under the current system.

Who supports protecting North Carolina’s low auto insurance rates?

Low Rates NC – a coalition of auto insurers, North Carolina insurance agents and consumer groups – formed to fight legislative threats to North Carolina’s competitive, low-cost system. Together, we believe it is important to educate the public and legislators with factual information on this critical issue to help protect low auto insurance rates for all North Carolinians. Low Rates NC members include:

  • AAA Carolinas
  • AAA Insurance
  • AARP
  • Alliance of Insurance Agents of North Carolina
  • AmTrust Financial Services
  • Dairyland Insurance Company
  • Discovery Insurance
  • Greenville Casualty
  • Jenesis Software, Inc
  • National General Insurance
  • N.C. Farm Bureau
  • Nationwide
  • Peak Property and Casualty Insurance Corporation
  • Professional Insurance Agents of North Carolina
  • Sentry Insurance A Mutual Company
  • Southern General Insurance
North Carolina has 152 insurers with more than 2,000 different discounts approved by the Commissioner of Insurance