New Royal Couple Says Yes to Auto Modernization in North Carolina

Well, not really but this is probably a topic they would be interested in if Prince William and Princess Catherine were licensed drivers in North Carolina.  Here are the facts:

–  There has been little change in the private passenger auto insurance rate making system in North Carolina since the mid-1970’s.

–  “Clean Risk” account for 14 – 15% of all drivers in North Carolina. The current “clean risks” surcharge is about 5% which is being paid by all drivers in North Carolina.

–  The disappearance of the “clean risk” surcharge would result in a reduction in insurance costs to approximately 85% of North Carolina policyholders. The surcharge is hidden in the premium.

–  North Carolina has more drivers in the Facility (approx. – 1.4 million) than all other 49 states combined.

There are currently two bills that have been introduced in the legislative session under the heading of auto rate modernization.

Senate Bill 490 by Senator Rucho and strongly supported by State Farm, is an aggressive and radical approach to modernization. It removes Private Passenger Auto and motorcycle from the jurisdiction of the NC Rate Bureau. If passed, the bill would be enacted January 1, 2014 without any kind of transition.

Senate Bill 477 by Senator Apodaca  and strongly supported by IIANC and the North Carolina Insurance Federation, calls for a five year (5) phase-out of the “clean risk” sub classification in the auto facility. Deviations above the Bureau rate would be allowed for insurers provided the Commissioner of Insurance does not determine the deviations to be excessive.

So, what do you think? Are you happy with the current rate making system in North Carolina or would you opt to move from a mid-20th century system to a more modern system which would allow possibly for a more competitive auto insurance market.

I look forward to hearing your thoughts on this imporant issue.


  1. By Danny Keel