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EDITORIAL: Car Insurance Revisited

May 27, 2007

By The News & Observer, Raleigh, N.C.

May 28--One of the lessons in Legislating 101 is that when your bill doesn't have the votes, don't just throw it to the wolves. There's little reason to press ahead with something headed for certain defeat -- take it back to the lab and try to make it something your colleagues can swallow without gagging.

State Sen. Tony Rand of Fayetteville hardly needs to be reminded of a rule so elementary. After all, if there were a doctorate in the legislative arts, he'd have about three.

So it was no surprise to hear that Rand tactfully has decided to defer a proposal that made many ordinary North Carolinians' hair stand on end. Those would be North Carolinians who buy car insurance, of which there are a bunch.

This had been a classic case of moving to fix something that wasn't busted. Rand wanted to take away the state insurance commissioner's authority to set auto insurance rates. Yet this state's system works well enough so that rates here are among the country's lowest.

Insurance companies with a grievance can always appeal the commissioner's decision into the courts. But when they do that, they typically lose -- another sign that rate decisions under Commissioner Jim Long, in office lo these many years, have tended to be reasonable.

Now Rand, the Senate majority leader, might have been able to ram his proposal through. But he probably decided it wasn't worth the effort.

And another factor happened to come along: The N&O's Speed Unlimited series, which highlighted various kinks in the way speeders are supposed to be hit with higher insurance charges. In fact, many speeders use loopholes in the justice system to wriggle off what could be a very painful hook.

So Rand, in statesmanlike fashion, decided that the better course was for the General Assembly to undertake a thorough study of interrelated issues related to auto insurance -- not just how overall rates are set, but also how penalties and surcharges are applied.

This is the right way to go about laying the groundwork for any changes to the system. Here are some parameters for legislators to keep in mind: fairness to both companies and customers, transparency, and a rational way to make sure dangerous drivers pay enough for insurance to reflect the risks they pose.

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Copyright (c) 2007, The News & Observer, Raleigh, N.C.

Distributed by McClatchy-Tribune Information Services.

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