North Carolina’s Archaic Insurance Rate System Unique in U.S.

Guest post from IIANC Chairman of the Board David Purinai, AAI, CIC, CRM. David’s opinion piece was originally printed in the Rocky Mount Telegram on 3/9/13.

Which is less expensive? One scoop of ice cream for a dollar or two scoops at $1.50? If you listen to some of the voices in Raleigh who are opposed to auto rate modernization, they’ll clearly tell you that the single scoop for a dollar is cheaper.

Currently, insurance companies who do business in North Carolina are limited by our state government as to how they determine what they will charge for your insurance and what particular coverages they can provide to you the consumer.

This archaic way of pricing has been in existence since the mid-1970s and is unlike any other state in the United States. In fact, most insurance companies will put North Carolina at the bottom of the list when it comes to introducing a new product or coverage enhancement.

Virtually all of the enhancements advertised on national television for auto insurance are not available to consumers in North Carolina.

Add insult to injury, North Carolina currently has more than 20 percent of its drivers in a market of last resort (N.C. Reinsurance Facility), which is subsidized by our state’s preferred drivers. It gets worse. North Carolina has more drivers (more than 1 million policies) in this market of last resort than all other 49 states combined.

So guess who is opposed to changing this highly political, one-legged stool of a system? It’s those companies who have much of their business in the profitable, subsidized state market of last resort.

I’m not an elected official but an independent agent who has been representing my clients for more than 28 years. These are the customers who should have the ability to buy insurance in a free and open market system – just like everyone else in the nation does.

Some customers want two scoops of ice cream for $1.50 and believe that is a better deal. Please allow North Carolina to become a more free market and support auto rate modernization.

David W. Purinai
President, MSH Insurance
Rocky Mount, NC

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