The North Carolina House of Representatives is considering bills that could cut auto coverage rates for some drivers in the state after senators overwhelmingly passed the pieces of legislation last week.
SB 180 would allow insurers to bring exclusive discounts and coverage programs to North Carolina, giving drivers access to specialty offers like usage-based programs. The bill passed by a 44-0 vote on Thursday.
The current system requires that the state’s insurers submit a joint proposal annually for rate changes to the insurance commissioner via the North Carolina Rate Bureau (NCRB).
Using that collective system, “choice is limited” for drivers looking to take advantage of insurer-specific discount programs like Progressive’s Snapshot and Allstate’s Drivewise, according to advocacy group Fair Automobile Insurance Rates for North Carolina (FAIR NC).
“It’s a flawed system that stifles competition [and] limits consumer choice,” FAIR NC said in a statement.
Representatives also passed SB 181, which allows insurers to consider age when pricing a customer. The vote, also on Thursday, was 43-1.
Currently, North Carolina insurers can only take years of driving experience into account, not the actual age of the driver.
North Carolina insurers are barred from using age directly as a factor in determining premiums, with current law requiring that surcharges be based on the “insured having less than three years’ driving experience as licensed drivers.”
SB 181 would trade that phrasing for drivers “who are less than 19 years old,” meaning motorists who obtained their license later in life could be spared from the surcharge.
Car insurance for teenagers in most states is typically pricier than for other age groups because the youngest drivers are both less experienced and among the riskiest to cover. According to the National Highway Traffic Safety Administration, teens are, mile for mile, involved in three times as many fatal car crashes as other drivers.
The approving votes from senators push both bills to the House of Representatives for further consideration.
Also last week, a state House committee vote fell short of passing extensive reforms of the auto coverage system. HB 265, debated at a hearing last Tuesday before falling to an 18-11 vote, would have allowed companies to pass over the rate-making process currently overseen by the NCRB.
Under the bill, insurers would have been allowed to submit their own filings separate from the NCRB for increases up to 7 percent annually.
Supporters said that the bill would have cut premiums by increasing competition between insurers, though opponents said that North Carolina’s auto coverage setup already generates rates that are among the lowest in the U.S.
The National Association of Insurance Commissioner’s calculation of what drivers spent for coverage on their vehicle in 2010 ranks North Carolina as the 45th-lowest.