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Insurance Fees Under Review: Driving Infractions Lead to Surcharges

Aug 8, 2007

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

Aug. 9--The state Senate will study insurance surcharges levied on drivers convicted of speeding and other traffic offenses and submit a report when the General Assembly reconvenes in May, Senate Majority Leader Tony Rand said Wednesday.

The study, part of an overall review of auto insurance rates in North Carolina, might begin next month.

"It's obvious we've got a ... mess, and we need to do something about it," said Rand, a Fayetteville Democrat.

Under state law, the insurance industry levies three-year surcharges that range from 25 percent for repeated minor speeding violations up to 340 percent for driving while impaired and other serious offenses.

At speeds of more than 80 mph, the insurance penalty is severe: 80 percent for three years for a conviction of, for example, 81 in 70 mph zone.

The surcharges have driven people to look for a way out when they are charged with speeding, court officials have said. During the last 20 years, the General Assembly has obliged speeders by creating several loopholes. The result: Relatively few people are convicted as charged, allowing the rest to avoid insurance penalties, The News & Observer reported in a recent series, "Speed Unlimited."

Prosecutors, for example, have been able to let drivers plead multiple times to having a broken speedometer -- even though nothing is wrong with their speedometers.

Legislators plugged one hole last week, passing a bill saying drivers charged with speeding more than 25 mph over the limit were ineligible for a plea to improper equipment -- speedometer or a prayer for judgment continued, a break almost as good as a dismissal. They also required the state Division of Motor Vehicles to begin recording most improper equipment pleas, so prosecutors who require defendants to bring their driving record to court can spot chronic speeders.

A study bill that authorized dozens of initiatives, including the insurance study, was approved by the Senate but failed in the House last week because of differences in what the two bodies wanted to do.

Rand said, however, that the Senate would go ahead with the review of auto insurance rates. He said he would invite representatives of the insurance industry, DMV and the state Department of Insurance to participate.

Staff writer Pat Stith can be reached at 829-4537 or pat.stith@newsobserver.com.

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

Distributed by McClatchy-Tribune Information Services.

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