Auto Insurance Rates Zoom

Opening the Sunday paper, my eye caught the following headline.

Rates up for auto insurance

Trend follows Georgia’s passage of law that lets companies increase charges without state permission.

So now the carriers can increase rates at will with impunity.

At least that is the implication.

Many Georgia motorists have seen auto insurance rates rise this year, and the increases have accelerated since a new state law went into effect allowing companies to raise premiums without first getting state approval.

Until recently, auto insurance carriers had to first file rates with the DOI and wait for approval before the rates could go into effect. That changed in October when carriers were allowed to file rates without prior approval.

Since the Georgia law went into effect Oct. 1, many companies have filed to raise rates 5 percent to 10 percent. A few drivers considered more risky could see their bills jump as much as 81 percent.

So "risky" drivers are being asked to pay more.

I suppose this is unfair.

Not the way I see it. Why should I have to pay a higher rate just because someone else chooses to drive recklessly?

My good driving record should stand on its' own merit and those with bad driving records should be made to pay more.

Eddie Baker, director of building services at a Macon hospital, said he was surprised when his auto insurance came up for renewal earlier this year and his company raised the rate 27 percent. So he shopped around and switched companies.

Sounds like the free market it working.

If you don't like the rate, see if you can find a better one.

So what's the beef?

Hubert Welborn, a Warner Robins retiree on a fixed income, said his rates almost doubled this year when he turned 75.

Isn't most everyone on a fixed income?

Most folks work for a salary, or an hourly wage. They make the same each week (barring working more or fewer hours is you are compensated hourly).

Welborn couldn’t find a better deal elsewhere, so he increased his deductibles —- the amount he would pay out of pocket in case of an accident —- and stayed with the same company. That cut the cost of his coverage.

This is risk management.

“I have been involved in insurance regulation for 30 years,” Klein said. “I really have not seen any benefits to requiring prior [state] approval of rates. Competition in these markets is relatively fierce. That’s going to, by itself, regulate a company’s pricing.”

This is what you call a "duh" moment.