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North Carolina bill would eliminate hidden surcharge for auto insurancePosted On Thu, April 14, 2011
In a move that will likely put the Insurance Federation of North Carolina into the good graces of the area's motorists, the organization is backing a bill that would lower rates for all of the state's drivers.
In North Carolina, drivers who are considered to be greater insurance liabilities are placed in a high-risk insurance pool, known as the N.C. Reinsurance Facility. But this pool has ballooned to 1.4 million drivers, forcing every motorist insured in the state to pay a hidden surcharge.
If SB 477 is passed, IFNC says high-risk drivers would gradually be taken out of this pool and be allowed to purchase the insurance they want. Meanwhile, it would also remove the surcharge, decreasing premiums for everyone by between 5 and 7 percent, according to the IFNC.
"North Carolina drivers account for more than 80 percent of the drivers in the country who are assigned to high-risk pools," IFNC said in a statement. "We don't think 80 percent of the nation's bad drivers are North Carolinians."
According to Insure.com, motorists in the Tar Heel State pay some of the cheapest auto insurance prices in the country, averaging $1,154 per year.
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