System for insurance rates divides insurers in North Carolina


North Carolina’s auto insurance industry stands divided over the way in which insurance rates are being calculated in the state. Though the rates that the drivers in this state are paying are significantly lesser than the drivers in other states, the safe drivers in this region are paying more than they should be. The arrival of the next year will witness the auto insurance industry in this state striving towards bringing about certain changes that can work in favour of everyone, especially the safe drivers.

One of the most recent reports from the National Association of Insurance Commissioners revealed that the motorists in this region enjoyed the lowest premiums for auto insurance coverage along the East Coast, except for the year 2010 when Maine took the top spot. The annual average premium for the drivers in this state stood at $707, including comprehensive coverage, collision coverage and liability coverage. The data released by the NAIC shows that this average was the eighth lowest in the country, in the list that was led by states such as Maine, five states in the Midwest and Idaho. The national average annual auto insurance premium stood at$907 which was $200 more than the average cost being paid by North Carolina residents. The report by NAIC has also revealed that the overall average auto insurance premium has seen a decrease of 3 percent since 2006.

Independent Insurance Agents of North Carolina’s Vice President, Stuart Powell said that companies operating out of North Carolina find automobile insurance highly lucrative even though there is particular limit on the competition in terms of price among the insurance providers in this state. Despite this, a few insurance providers led by companies such as Progressive, All State, State Farm and Geico would like to revamp the current system that sets the rates for over seven millions auto insurance policy holders in this region. These companies argue that the changes they are advocating will work in favour of the safe drivers in this region.

According to David Marlett, Appalachian State University’s insurance expert, and Powell, North Carolina drivers enjoy low priced auto insurance premiums because of multiple reasons such as low population density, good roads and traffic law enforcement.