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Jim Long and the myth of the low North Carolina auto insurance rate

There's many ways to lie, and Jim Long is lying with statistics. You see, in most states, insurance rates go up if you have an accident, and those higher rates are factored into the calculation of "average insurance rate". For example, in Louisiana, there are two pools -- the "low risk" pool, with low rates, and the "high risk" pool, with higher rates -- and the two are averaged together to say that Louisiana has some of the highest insurance rates in the country.

In North Carolina, by contrast, there is only one rate -- the "approved" rate that Jim Long is trumpeting about. The problem is that close to half of North Carolina citizens have had a traffic ticket during the past three years and don't pay the "approved" rate. Rather, they pay the "approved" rate PLUS a "bad driver penalty" that the insurance company collects and keeps. The "bad driver penalty", unlike in the majority of states, is not counted as being part of the "insurance rate", allowing Jim Long to trumpet how great he is.

To compare: My insurance rates in Louisiana, a "high rate" state, were HALF of what they are in North Carolina, a "low rate" state. I'm talking about both the "no points" base rate (State Farm's base rate in Louisiana is half of what it is in North Carolina) and the "had 3-point accident two years ago" high risk rates. So how in the world can Jim Long trumpet that he has better insurance rates than in Louisiana? Well, it's simple -- he doesn't count the "high risk" rates, because they're defined as a "penalty" instead.

First of all, there's a slight legal problem with the whole penalty idea. If it's really a penalty, insurance companies are acting under the authority of the insurance commissioner to impose punishment WITHOUT DUE PROCESS, a clear violation of the 5th Amendment. If we say "well, no, it's not a government-imposed penalty" to avoid the 5th Amendment problems, then we're talking about an approved insurance rate -- which should be reported as such.

Let's quit lying and start calling an insurance rate an insurance rate. Tell Jim Long that you want to know what people are REALLY paying in North Carolina -- not that fictitious "low insurance rate" that he keeps trumpeting about.