Editorial: W.Va. Reduces Insurance Rates

Dealing With Some Complaints Out Of Court Has Helped Consumers

Charleston Daily Mail, October 5, 2005

This summer, West Virginia drivers received something unexpected from their auto insurance companies-- decreases in their premiums. Yes, after seeing their rates rise by an average of 30 percent from 2000 to 2004, West Virginians saw a decrease of as much as 10 percent, depending on their insurance company. The premium decreases total over $61 million.

The largest auto insurer in the state, State Farm, accounted for more than half that total as it dropped rates by 10 percent.

This will help West Virginians who, although they rank 48th in per capita income, rank 20th in average auto premiums, according to the state Insurance Commission.

Insurance Commissioner Jane Cline credited lawmakers for the change. Last year, legislators changed state law to let insurance companies drop the worst drivers. Out of 3,500 drivers who could have been dropped, the top three insurers dropped only 100.

The idea that everyone's premiums should be higher because of 100 bad drivers is ridiculous, but that clearly was the effect of state policy.

But the main change came this year, when law-makers took insurance disputes out of the court system and put them into the hands of the insurance commission, where such complaints should be handled. Most other states handle disputes this way rather than through the courts.

This may have hit the wallets of trial lawyers, but that $61 million drop in auto premiums just made 1.3 million drivers happy.

This change did not come easily. Trial lawyers lobbied for years against this change. But the Legislature finally bit the bullet and brought this long-needed reform to the state's auto insurance industry.

It increased competition. That reduced prices. This is how the marketplace should work.

Not everything can be legislated. The average cost of a bodily injury claim in this state is 50 percent higher than the national average. The variables involved in that are beyond the power of politicians to legislate.

But lawmakers did change bad laws. Said state Sen. Frank Deem, R-Wood: "We never read how great this Legislature has done about addressing this problem."

Well, he just did.

The Legislature got this one right. Drivers in West Virginia appreciate it.