Industry-backed legislation that would allow auto insurers to raise rates by up to 15 percent a year and weaken North Carolina’s current regulatory system would lead to higher consumer costs, The Associated Press reports, citing the state’s top insurance regulator.
“The bottom line here is this: insurance companies want more of your money. These proposals would no doubt lead to higher car insurance rates,” Insurance Commissioner Wayne Goodwin said at a news conference. The current system “strikes a necessary balance between the consumers’ interest and the interests of the insurance companies. Auto insurers make enough money to keep doing business here profitably and drivers have relatively low rates.”
North Carolina has among the lowest auto insurance rates in the country, the National Association of Insurance Commissioners and consumer insurance-information service Insure.com agree.
Insure.com found that comparable policies for a 40-year-old single male driver who commutes 12 miles to work in North Carolina paid $1,154 a year, seventh-lowest in the country, compared to a national average of $1,561.
Goodwin said that’s at least in part due to North Carolina’s unusual regulatory system, which allows the insurance commissioner to limit auto insurance rates. But a spokesman for the industry group working to limit price regulation says the current system benefits less-desirable drivers and raises prices for the least risky drivers.
“Really the best regulator of price is competition,” said David Stoller, a lobbyist for State Farm Mutual Automobile Insurance Co. “That’s why companies advertise, they want to compete on rates.”
The state’s current regulatory system requires each of the 175 auto insurers doing business in North Carolina to propose a common, industry-wide rate increase or decrease. That request is reviewed by the Insurance Department’s staff, and Goodwin’s office could push for changes.
