Why an NC Insurance Company's Rate Letters Were Revised
North Carolina insurance companies operate under federal regulations and those enforced by the North Carolina Department of Insurance. Regulations apply to many different areas of insurance operations - from terms in policies, to deadlines and timeframes for compliance, to minimum coverage requirements - the insurance companies themselves have several departments to help manage and oversee standards are satisfied. However, missteps or mistakes can occur.
The Society of Collision Repair Specialists maintains a site Repairer Driven News with details about all things related to automotive repairs. Some items cover materials used during repairs, while others address issues that surface during the car insurance claims process. Earlier this month RDN posted a piece about a Charlotte insurance company that was allegedly advised to revise their rate letters. (As of this writing and as per RDN, the letter RDN references in their post had been redacted by their source.)
Why would an insurance company be instructed to revise their rate letters? In the circumstances described by RDN, the letter advised the policy holder that the policy holder would be responsible for the difference in labor rates over a certain maximum limit that the insurance company would provide. In essence, the company was leaving it on the shoulders of the policy holder to either locate a service shop with rates that fit the insurance company's provisions, or negotiate a rate with the service shop themselves. Insurance companies that operate in good faith will try to find a reason or means to compensate the policy holder. According to the letter in the example, the company stated their limits and provided no alternatives.
According to RDN, the insurance company in Charlotte stated the letter must have been an error and then revised the letter to better reflect its position on the claim. This position is to "reach an agreed repair price on accident-related damages and to pay all that we owe on every claim."
Learn more about bad faith insurance conduct in North Carolina.
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