North Carolina Auto Insurance Rate Hike In Escrow Until Court Rules

Loading...

Thanks! Share it with your friends!

You disliked this video. Thanks for the feedback!

Source " />
Loading...
Added by admin
0 Views

Auto insurers may increase premiums on North Carolina drivers by up to 9.4 percent starting Jan. 1, but a court ruling will determine whether they can keep the extra money.

The North Carolina Rate Bureau, which represents 144 auto insurers that operate in the state, had asked for its largest rate increase in 14 years — 12.9 percent. But Insurance Commissioner Jim Long turned the tables, instead ordering a 16 percent cut.

Long ruled that the data insurers submitted didn’t justify the increase they sought. The insurance department also argued that the companies skewed their depiction of North Carolina’s market by including claims from riskier drivers who are inexperienced or who rack up insurance points against their license and other decisions. Those drivers are assigned to the North Carolina Reinsurance Facility.

Insurers revamped their requested rate increase in their appeal to the state Court of Appeals last month and are now seeking 9.4 percent, Rate Bureau general manager Ray Evans said.

Under state law, insurers can charge the higher rate beginning Jan. 1, but any amount collected above the 16 percent cut ordered by Long must be placed into escrow accounts. If insurers win their appeal, they can keep the money. If they lose, they would have to refund the money to policyholders, plus pay interest at the prime rate plus 3 percent.

“The commissioner ordered what he felt was appropriate. We’ll let the appeals process run its due course,” said Bob Mack, deputy state insurance commissioner for property and casualty.

A court hearing on the appeal has not been scheduled.

Evans said the insurers trimmed their rate request considering the commissioner’s projections on the rate of inflation and some other factors, such as the frequency and severity of accidents. Long’s projections were close to the insurers’ estimates but somewhat lower, and the courts generally defer to the commissioner on such matters, Evans said.

The Rate Bureau argued in its original request for increased premiums that rising costs for medical care and car repairs justified higher rates, along with the slowing decline in accident rates.

Insurance rate increases regulated by the state commissioner are the maximum rates auto insurers can charge. Competition drives insurers to charge many drivers less than the top rate.

Long decided not to seek re-election this year after 24 years in office. He is being replaced next month by fellow Democrat Wayne Goodwin.


Source
Category
Misc

Post your comment