January 25, 2012
Nationwide Speaks Out on N.C. Automobile Insurance Rate Modernization
Raleigh, North Carolina - Nationwide Insurance Regional Vice President for North Carolina Lee Morton spoke before the N.C. Legislative Research Commission Joint Study Committee on Automobile Insurance Modernization today. Morton spoke about the healthy, robust, competitive, diverse, and low-cost auto insurance system that currently exists in the state and cited concerns for the unintended consequences changing the system will have on North Carolina’s drivers.
“North Carolina’s insurance system is fair to all drivers, protects consumers from unjustified rate hikes, and encourages everyone to buy insurance, to the public’s widespread benefit,” Morton said. “Scrapping the current system will lead to an increase in insurance premiums for about 992,000 policyholders, and we do not believe the people of North Carolina want higher auto insurance rates, less independent oversight, more uninsured drivers, or a more volatile insurance market.”
Morton cited the following as consequences of enacting SB 490 or similar legislation:
- North Carolina’s historical auto rate stability will become extinct.
- Consumers will no longer be able to compare insurance quotes on an even basis.
- If the North Carolina Reinsurance Facility was abolished tomorrow, the necessary uptick in premium for every clean risk now written in the Facility would average $150 per policy.
- Hundreds of thousands of North Carolina families with high school and college drivers will pay more to insure them.
- The elected Commissioner of Insurance will lose his authority to help protect consumers, who by North Carolina law are required to buy auto liability insurance.
“North Carolina’s system is not perfect – none are, but it’s a system that provides North Carolina with stability, oversight and the lowest auto rates in the Southeast,” added Morton. “Proponents seeking to scrap North Carolina’s current system aren’t providing all the facts. In addition to a rise in the number of uninsured motorists, reflecting the premiums charged to some drivers who will no longer be able to afford coverage, the cost of uninsured drivers will work its way into the rates of law-abiding citizens. Nationwide has been doing business in North Carolina for more than 83 years and serves nearly 670,000 auto policyholders; we believe we have a responsibility to share the complete story with consumers.”
Nationwide, based in Columbus, Ohio, is one of the largest and strongest diversified insurance and financial services organizations in the U.S. and is rated A+ by A.M. Best. The company provides a full range of personalized insurance and financial services, including car insurance, motorcycle, boat, homeowners, life insurance, farm, commercial insurance, administrative services, annuities, mortgages, mutual funds, pensions, long-term savings plans and health and productivity services. For more information, visit www.nationwide.com.