State insurance risk pool halves commercial auto surcharge

The North Carolina Reinsurance Facility (NCRF) will dial down the surcharge it has put on insurance policies for commercial drivers in the state.

Officials with the state’s insurance risk pool will implement a 7.83% surcharge, which will be assessed on both new and renewal commercial vehicle policies in NC, effective October 01; previously, the surcharge was 14.63%.

Transport Topics reported that the surcharge applies only to commercial liability coverages, which include bodily injury liability, property damage liability, medical payments, uninsured motorists and underinsured motorists’ coverage premiums. The surcharge will not be applied to a motor carrier’s policy for collision or comprehensive coverage.

The surcharge will be assessed on NC motor carriers, motor coach operators, taxi owners, logging truck operators, dump truck operators and others.

NCRF originally imposed the surcharge to recoup the losses it had sustained over the past four years. The facility attributes its losses to charging rates too low for uninsurable truckers and the decision to insure ineligible motor carriers.

The agency is facing a $96 million shortfall.

While some have welcomed the surcharge reduction, others are concerned that it does not improve the agency’s financial situation.

“They’re just putting it off. They’re still not managing it correctly,” said Rob Moseley, a Greenville, SC attorney whose clients include trucking companies in NC. “When you’re the one nobody wants to insure, you ought to be prepared to pay a higher rate. In North Carolina they’re not paying a higher rate, they’re paying market or better. That’s what is continuing to lead to the shortfall.”

“Rather than the people in the pool paying those losses, the people who are outside the pool also are being asked to pay the losses,” Moseley told Transport Topics.

Source

Posted in Truck Insurance News.