Save Low Rates for Home Folks

Unless you want to head west to the Dakotas, Idaho or Iowa, we're the place for the nation's lowest auto insurance rates.

However, that enviable ranking could be history if out-of- staters keep coming in droves with fraud in mind.

Legislation passed by the General Assembly and awaiting Gov. Mike Easley's signature takes direct aim at the scammers. Yet the watered- down final version may not get the job done.

According to the N.C. Department of Insurance, "tens of thousands" of drivers from other states could be cashing in on our low insurance rates and registering cars here. New York and New Jersey residents top the list.

By using bogus documents, out-of-staters can get much lower rates. But their deception comes at a steep price. Honest policyholders will end up paying more than they should.

That's because rates are based on where accidents happen, and the odds of having one are better in Brooklyn than in Pleasant Garden. Claims filed by nonresidents for wrecks happening elsewhere eventually translate into higher rates for North Carolinians.

We aren't the only loser. New Yorkers fraudulently registering cars aren't likely to pay costly parking tickets or get safety inspections. And wreck victims lose out when insurance carriers refuse to pay off on policies obtained under false pretenses.

Legislation introduced in the House made rate evasion a felony. Unfortunately, it was downgraded in the Senate with the final version settling for a misdemeanor. The rewrite makes extradition for trial unlikely.

On the plus side, requiring most motorists to have a North Carolina driver's license before registering a car should reduce deception. Also, state investigators will be able to more vigorously pursue insurance agents brokering North Carolina policies out of state.

In the end, states must address the problem together. Companies selling car insurance can help by cancelling fraudulent policies. Whether here or in New York, fraud raises premiums.

(c) 2007 Greensboro News Record. Provided by ProQuest Information and Learning. All rights Reserved.