N.C. Auto Insurance Companies Ask for 13% Rate Hike
The North Carolina Insurance Commissioner received the annual auto insurance rate filing from the North Carolina Rate Bureau, according to Insurance Commissioner Jim Long.
The Bureau, which represents the auto insurance companies writing business in the state, requested an overall statewide average increase of 13 percent for 2008.
The filing came on Feb. 1, and will be reviewed by Department officials in the coming months. If officials do not initially agree to the requested rates, they will negotiate with the Bureau to reach a settlement. If within 60 days the Department has not been able to reach an agreement, a hearing will be called for later this year.
Long, who would serve as hearing officer, will review the current documents but withhold comment, as he is required by law to remain unbiased in such cases.
Department experts, however, say such an increase is unlikely to be warranted. The 13 percent increase is the largest asked for since 1994, and comes just a year after the companies agreed to zero change in 2007. The need for such an abrupt increase is questionable given that in the last three years, data has supported rates decreasing or remaining stable, according to the commissioner.
The Department rarely agrees with the Rate Bureau upon initial receipt of their filing, though settlements have been reached in the past. If the case goes to hearing, the commissioner will rule on rates and any appeal would go through the court system. The rates set in these cases represent the highest amount allowable for companies to charge; rates are standardized for all companies. Companies can and regularly do offer discounts to their policyholders.
Since taking office, Commissioner Long has consistently ruled for small or no rate increases and in many cases has ordered rate decreases. Combined, this has potentially saved drivers an estimated $4.3 billion.
Source: North Carolina Insurance Commission