North Carolina Contemplates 13% Car Insurance Rate Increase

At the beginning of this year, the North Carolina Rate Bureau, speaking for the interests of North Carolina’s auto insurance providers, asked the North Carolina Department of Insurance–a state agency–to issue a ruling increasing North Carolina drivers’ auto insurance rates by a mean of 13%. The Department of Insurance did not begin its decision-making process regarding the proposed increase until the end of June. Now, auto insurance policy-writers based in Virginia are waiting for a decision from the North Carolina Department of Insurance, which is not estimated to come before the middle of August.

The North Carolina Department of Insurance is reluctant to approve the statewide rate increase. The NCDOI asserts that current conditions in the state of North Carolina do not warrant the rate increase. The risks posed to auto insurance providers, says NCDOI, haven’t increased since last year, a time when auto insurers had agreed to keep rates constant.

Over the course of the hearing to determine whether or not rates are to be increased, the NCDOI will seek to prove that the North Carolina Rate Bureau has used misleading statistics to back its demands for the statewide auto insurance rate increase. The Rate Bureau has included in its data claims filed with the North Carolina Reinsurance Facility.

The North Carolina Reinsurance Facility does not charge the Rate Bureau’s standard insurance rates, the ones that the Rate Bureau is petitioning to change. The North Carolina Reinsurance Facility would naturally evince a higher amount of claims filed, because this organization works with drivers already proven to represent a higher risk.

North Carolina’s Insurance Commissioner, Jim Long, is saddled with the task of approving or vetoing the Rate Bureau’s proposed statewide rate increase. Once Long makes ruling, the Rate Bureau has the option of appealing the ruling through the courts.

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