Legislation promises auto insurance rate reform
Published 10:59 am Friday, April 1, 2011
RALEIGH – Legislation introduced this week by Senator Bob Rucho, a Mecklenburg County Republican, will modernize North Carolina’s outdated and non-competitive system for establishing automobile insurance rates.
Senate Bill 490 “Private Passenger Nonfleet Auto Insurance Regulatory Modernization Changes” addresses the fact that, over the last five years, North Carolina consumers paid $900 million in surcharges to subsidize higher risk drivers . This subsidy, a mystery to most consumers, is hidden from the public under current state law.
North Carolina stands as the only state that still requires auto insurers to develop rates collectively through a Rate Bureau. The majority of states have recognized consumer benefits occur when competition is allowed to take place in the auto insurance market.
“The government should not be involved in price fixing. Today’s system hinders competition among insurance carriers, increases costs and limits consumer choices,”
said Senator Rucho. “By taking steps to modernize the auto insurance regulatory environment, consumers will benefit from aggressive competition and improved product choice.”
“North Carolina consumers deserve better,” said FAIR NC spokesperson Katy Feinberg. “The time has come to modernize the state’s archaic regulatory environment to foster competition, and allow North Carolina drivers to pay rates that more fairly match price to risk.”
Senate Bill 490 is supported by the Fair Automobile Rates for North Carolina (FAIR NC) Coalition. To better educate the North Carolina public, the FAIR NC Coalition launched the issue advocacy website, www.fairncrates.com, where citizens can communicate and take action as well as share and connect via social media.