Insurance rates in North Carolina can be confusing, especially when working with an online company. Using an independent insurance agent can help in navigating your way through these tough times in the insurance industry. As claims rise and underfunding prevails, the insurance companies are looking for new ways to increase their rates outside the scope of what is regulated by the state.
Each state is different in how it determines its rates. In North Carolina, for example, the insurance rates are set by the North Carolina Rate Bureau. The Bureau tells the insurance companies the maximum rates they can charge consumers for home and auto policies. Your insurance company can decide they want to charge you a higher rate depending on several factors. But, they can’t charge this additional rate without your consent.
Consent to Rate Letter
That’s where the “Consent to Rate” letter comes into play. If the insurance company deems you a high risk, a “Consent to Rate”letter will be mailed to you. The letter will basically ask you to give the insurance company permission to charge you rates on your policy that exceed the state maximums. When you sign and return this letter you are essentially giving the insurance company your permission to be charged rates higher than those established by your insurance commissioner. This letter can be held in your file until the insurance company deems it necessary to use.
Why the Higher Rates?
Why would your insurance company ask to charge you a higher rate? There are a few factors they consider before mailing the Consent to Rate letter. Insurance companies are singling out high risk insurers for numerous reasons:
-Your home is located in a storm area susceptible to tropical storm surges or hurricanes.
-Your insurance company deems you high risk because of numerous claims
-Some insurance companies are looking at your credit score to determine their risk in insuring you
