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Auto Insurance May Spike

May 2, 2008

Legislation passed in March by the Georgia legislature awaits Gov. Sonny Perdue’s signature and would allow auto insurance carriers to hike premiums without seeking prior approval from regulators.

Georgia Insurance Commission John Oxendine opposes the legislation and has urged the governor to veto it.

Currently, 30 auto insurers are poised to raise rates if the bill is signed, and one of them hopes to increase rates for some drivers by as much as 63 percent.

However, supporters of the legislation note that the market has changed significantly since the 1980s and consumers can now shop online for competitive rates.

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According to the bill, Oxendine and his staff would have very little recourse if auto insurers increase rates excessively.

The Consumer Federation of America reported that prior-approval systems allow rates to rise more slowly than in states without the prior-approval systems in place. Gov. Perdue has not stated if he will sign the legislation, though he did express some reservations about it.

Meanwhile, insurance market observers indicate changing the system would provide auto insurers with greater flexibility and increase competition in the state.

press release ~ Atlanta Journal-Constitution (05/01/08) P. 1A

by Salzer, James

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Written by Be Safe Insure · Filed Under Car Insurance, Insurance Regulation 

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