Does the North Dakota Insurance Department Set Auto Coverage Rates?
The North Dakota Insurance Department is responsible for regulating auto insurance rates, but not setting them. Coverage providers set rates based on data that indicate a driver's risk of filing a claim. Although individual insurers use different methods for determining a motorist's level of risk, companies still generally examine the same range of information.
Rates for North Dakota auto insurance are affected by the personal information of individual drivers combined with the statistical information about other drivers who share the same characteristics. The details that insurers commonly consider, which policyholders may have little control over, can include a motorist's age, gender, marital status, and location, among many others. Variables such as a driver's desired level of coverage, car type, annual mileage, and claims history can also be influential.
Each of these details helps insurers determine an applicant's level of risk. For example, in the Peace Garden State motor vehicle accidents are the leading cause of death for teenagers. In 2010, teenage drivers were involved in more than 20 percent of the total number of accidents in ND, and male drivers between the ages of 21 and 24 represented the highest percentage of speed-related crashes in the state. As a result of this heightened risk, motorists under the age of 25 commonly encounter higher coverage costs.
One of the more influential details that an insurer examines is a driver's claims history. Often the impact of accidents on auto insurance rates can be tremendous, especially if the policyholder is liable for expensive damages. And convictions for things like driving under the influence and reckless driving can indicate that a motorist is a higher-than-average risk, which could lead to higher policy prices.
The level of coverage that a motorist buys may also have a noticeable impact on a resident's insurance premium. Although North Dakota is home to some of the nation's lowest expenditures, rates can still fluctuate considerably based on the policy's extent of protection. ND motorists are only required to carry bodily injury liability, property damage liability, uninsured/underinsured motorist coverage, and personal injury protection, but additional options are also available for an added cost. Adding comprehensive and collision coverage, for example, can have a noticeable impact on a driver's premium, but it also covers a wide range of damages.
Although the ND Insurance Department is not responsible for setting auto insurance rates, it still works to ensure fair and healthy competition among insurers, and it is responsible for ensuring that coverage providers use reasonable methods for rating motorists. Additionally, the department regularly provides residents with valuable information and helps resolve complaints against coverage providers in the Peace Garden State.