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Another reason to be conscientious, defensive drivers. My husband and I qualify for the cheapest rates, due to safe driving records, but still, a 20% increase is going to hurt.
We will be moving from middle class to poor before long.
While this will give insurers the ability to raise rates, the more likely outcome is that high risk drivers will see their rates rise farther than low risk ones. An insurer wants to keep customers that don't make claims, and drop those that do. This makes it easier to accomplish that.
I've posted on this topic a few months back. I was a Product Manager for one of the large insurance writers in NC and the rating formula for auto is ridiculous.
Senator Rand is right on...this state does not allow enough segmentation in its rating to accurately price risks. What I mean by that is all drivers subsidize one another. For example, we know that teenage boys are a higher risk than teenage girls, yet you cannot discriminate on gender in NC. The reinsurance facility, which is the main issue here, operates at a negative since companies can't charge the appropriate premium for the highest risks.
Most everybody should have an idea about how competitive the industry is right now, especially in NC. The growth in population has created quite a market for insurance, especially that it tends to be more affluent population growth. Therefore, people can buy more than just auto like property, life, annuities, motorcycle, etc.
So, deregulation will provide a great opportunity for the best risks. EVERYBODY wants your business, and they will price it down near the bottom of the barrel. Why should I pay for somebody that has DUI's, speeding tickets, wreckless driving, etc.
With that said, the claims cost in NC are rising fairly significantly. The Avg Net Claim Payment of the company I worked for continued to increase each and every year. Some of that was risk selection, but a good part of it were market forces. Body shops, medical costs, etc have all been rising. That effects insurance just like everything else.
I've posted on this topic a few months back. I was a Product Manager for one of the large insurance writers in NC and the rating formula for auto is ridiculous.
Senator Rand is right on...this state does not allow enough segmentation in its rating to accurately price risks. What I mean by that is all drivers subsidize one another. For example, we know that teenage boys are a higher risk than teenage girls, yet you cannot discriminate on gender in NC. The reinsurance facility, which is the main issue here, operates at a negative since companies can't charge the appropriate premium for the highest risks.
Most everybody should have an idea about how competitive the industry is right now, especially in NC. The growth in population has created quite a market for insurance, especially that it tends to be more affluent population growth. Therefore, people can buy more than just auto like property, life, annuities, motorcycle, etc.
So, deregulation will provide a great opportunity for the best risks. EVERYBODY wants your business, and they will price it down near the bottom of the barrel. Why should I pay for somebody that has DUI's, speeding tickets, wreckless driving, etc.
With that said, the claims cost in NC are rising fairly significantly. The Avg Net Claim Payment of the company I worked for continued to increase each and every year. Some of that was risk selection, but a good part of it were market forces. Body shops, medical costs, etc have all been rising. That effects insurance just like everything else.
I've posted on this topic a few months back. I was a Product Manager for one of the large insurance writers in NC and the rating formula for auto is ridiculous.
Senator Rand is right on...this state does not allow enough segmentation in its rating to accurately price risks. What I mean by that is all drivers subsidize one another. For example, we know that teenage boys are a higher risk than teenage girls, yet you cannot discriminate on gender in NC. The reinsurance facility, which is the main issue here, operates at a negative since companies can't charge the appropriate premium for the highest risks.
Most everybody should have an idea about how competitive the industry is right now, especially in NC. The growth in population has created quite a market for insurance, especially that it tends to be more affluent population growth. Therefore, people can buy more than just auto like property, life, annuities, motorcycle, etc.
So, deregulation will provide a great opportunity for the best risks. EVERYBODY wants your business, and they will price it down near the bottom of the barrel. Why should I pay for somebody that has DUI's, speeding tickets, wreckless driving, etc.
With that said, the claims cost in NC are rising fairly significantly. The Avg Net Claim Payment of the company I worked for continued to increase each and every year. Some of that was risk selection, but a good part of it were market forces. Body shops, medical costs, etc have all been rising. That effects insurance just like everything else.
This is a great response, excellent info it is what we need on here.
We will be moving from middle class to poor before long.
Welcome to the club! It sucks, but at least you'll know you're definitely not alone.
Quote:
Originally Posted by apexguy
The reinsurance facility, which is the main issue here, operates at a negative since companies can't charge the appropriate premium for the highest risks.
While it's nice that insurance companies will be able to charge appropriately for high-risk drivers... what about those of us who have had a completely clean driving record since we started driving? Our rates are going to go up too - not because we suddenly started driving badly, but because everyone else is.
I'm not in favor of anything getting more expensive for no reason other than the fact that someone, somewhere, thinks the "royal we" can afford it.
I'm not in favor of anything getting more expensive for no reason other than the fact that someone, somewhere, thinks the "royal we" can afford it.
So you think that your auto insurance, bread and milk, gasoline, ANYTHING YOU BUY should stay the same price and that product/service providers should simply eat the inflation?
Rising auto insurance isn't solely about increased risks on the road and more bad drivers...
So you think that your auto insurance, bread and milk, gasoline, ANYTHING YOU BUY should stay the same price and that product/service providers should simply eat the inflation?
Rising auto insurance isn't solely about increased risks on the road and more bad drivers...
Watch advertising, every company's trying to get more auto business. They must be doing quite well and don't need rate increases.
So you think that your auto insurance, bread and milk, gasoline, ANYTHING YOU BUY should stay the same price and that product/service providers should simply eat the inflation? Rising auto insurance isn't solely about increased risks on the road and more bad drivers...
No, of course not. A lot of times, it's oftentimes simply about greed.
Why anyone would advocate increased rates that creates a heavier burden on the middle class, I don't know (actually, I do). Gas prices go up and there are those who will side with the oil companies and, at the same time, boo-hoo the consumer. All the while, working class wages don't seem to be going up proportionately at all. So, now, we'll have less to spend for the rising food (which is far more expensive here than where I came from). 20% percent, relative to what people are bringing home to support their families, is just terrible and I would never support that especially since I haven't really had a need to use it.
And regardless of any insurance company rah-rah advocacy, insurance companies will always make more money than anyone will know what to do with while doing their best to prevent people from filing or receiving claims in ever clever ways (I know of people who won't file a claim out of simple fear that their rates will increase even if it's not their fault).
Even if insurance companies kept prices the same, I'm sure their profits will continue to be heavy. I highly doubt that they are not.
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