The latest proposal in the state would change the way that the premiums are regulated.
A newly proposed change to North Carolina law would make a dramatic change to the way that the state regulates its auto insurance rates, which some are concerned would mean that the premiums will soon be on the rise.
At the moment, North Carolina is the only state where a rate bureau caps the rates that can be charged.
However, a number of bills have been proposed which would give auto insurance companies the ability to select their own rates, provided that the increase every year is less than 12 percent. The bill’s supporters have said that the consumers will see a considerable benefit as it will promote competition in a free market system and will, therefore, naturally cause the rates to decrease.
That said, the auto insurance rate regulation bill is highly controversial and some are worried.
Critics of the bills have said that it is unlikely that consumers will see their premiums decreasing if the bills should become law. According to a spokesperson for AAA Carolinas, Angela Vogel, “The fact is there are 160 insurance companies already operating in North Carolina, so the competition is already there. It’s working for us; we have very low insurance rates.”
In opposition to the changes, AAA also stated that the current auto insurance rate system in the state has made sure that drivers are paying the lowest premiums in the South. It has also held the state’s rates at the seventh lowest in the entire nation. It pointed out that when South Carolina underwent comparable changes a few years ago, rates skyrocketed by 25 percent.
The bills that have been proposed would make it simpler for North Carolina to be able to implement the type of discount programs that are seen in other states. It would also make it possible to eliminate what is being called by proponents, a “hidden tax” that was designed to subsidize the expense associated with higher risk drivers. However, the state insurance department said that this added expense is only about $15 on the average driver’s policy.