NC auto insurance - unfair foreign driver policy

[paul. 0]

This has spooked me. I have 11 years professional driving experience in the UK, so hope Oklahoma won't sting me as bad as some of these quotes! I'm wondering, is it just those with foreign licenses? I intend to take the US drivers test ASAP.

[Nich-Nick 3,353]

My agent--State Farm in Texas--said my rates won't be higher by adding him to the policy. She also said I don't have to add him to the insurance until he gets the TX license. She said the CAR is insured, not the driver so if I give him permission to drive, the car is fully covered for the time being. Texas started a new policy Oct 1 and he was told he had to have a green card to get a license or have a visa with at least 6 months remaining on it. K1, being a 90 day visa, wouldn't do. However in reading over the list again, I believe EAD will be acceptable for them, so he will go take the tests soon. $690/6 months-newish sedan and sports car, for full coverage including other than collision, hauling and rental car reimbursement.

[Doug & Bobbi 1]

My agent--State Farm in Texas--said my rates won't be higher by adding him to the policy. She also said I don't have to add him to the insurance until he gets the TX license. She said the CAR is insured, not the driver so if I give him permission to drive, the car is fully covered for the time being. Texas started a new policy Oct 1 and he was told he had to have a green card to get a license or have a visa with at least 6 months remaining on it. K1, being a 90 day visa, wouldn't do. However in reading over the list again, I believe EAD will be acceptable for them, so he will go take the tests soon. $690/6 months-newish sedan and sports car, for full coverage including other than collision, hauling and rental car reimbursement.

Hey everyone, thanks for all the replies to My original post.

I haven't been here in a long while ( I actually have My AOS interview in march), but wanted to come see if anything had changed for anyone.

Some points I want to make just to clarify a few things.

1. The insurance issue with Foreign drivers experience being discounted is in reference to NC only (Other states my have this law but I can only speak about NC)

2. I am talking about insurance when you are in possession of a North Carolina Driving License, not a foreign driving license.

3. It is not a matter of arguing with insurance agents, they will simply state they 'have no choice', it is actually the North Carolina Rate Bureau (NCRB.org for those who would like to help badger them into changing this preposterous regulation) that set this policy and they are the only ones who can change it.

4. To the poster who stated that it must be because foreign drivers are high risk and if they weren't we wouldn't have to pay these high rates. Well, this isn't really true (for a start the US driving test is ridiculously easy compared to Europe, certainly, and have you seen American drivers? lol just kidding). The rule was brought in because of an issue of foreign drivers lying about experience and then inexperienced drivers having accidents (note 'inexperienced' not experienced). At least this is what the NCRB claim. Personally I think this is hogwash and agree that it is simply another way for insurance companies to make more money.

Their argument is this policy will help keep overall insurance costs down. It won't. What it will do is make people who don't want to pay such ridiculous insurance costs drive without insurance, costing even more in the long run.

Foreign drivers are not higher risk, because anyone who really understands driving knows that driving is the same wherever you drive. It isn't about what side of the road you drive on or what the road signs mean. The skills involved in driving are about adapting to road conditions, understanding your vehicle and it's place on the road, anticipation of other drivers and awareness of your own skills and flaws. This cannot be taught in driving lessons. When you pass a US driving test (or any driving test for that matter) you are NOT learning to drive, you are learning to pass a test. You do not learn to drive until after you pass your test, and it is a skill that cannot be taught, it has to be learned with experience. Once you understand traffic flow, road signs and rights of way etc, which passing a test says you DO know, then driving here is no different to anywhere else (and I have driven in a lot of places for My job). This policy is NOT about high risk drivers or lack of skills. This is simply a poorly considered policy, put in place to solve a problem. The arguments for it's instigation are flawed at their deepest level, and as I stated, it will not save money it will cost money in the long term because people need to drive for work and to be active, useful members of US society, and when you price them out, you risk forcing good people to break the law.

( I want to make it clear, I do NOT condone driving without insurance, I am simply stating that I believe this will be the result in a lot of cases.)

I have suggested a simple fix to this issue. When a foreign driver sets up a policy, there is a one time $250 charge for that driver. This cost pays for the insurance company (or the state driving authority) to contact the foreign drivers issuing agency for a copy of the drivers driving history, which the foreign agency would provide if a signed form from the driver giving permission for this information to be released was presented.

I think most of us would be happy to pay this one of charge and with modern technology the logistics are simple enough.

So far, I have had little luck with the NCRB. Mostly I have been bounced from pillar to post. I have been told 'speak to your insurance agent for details of the policy' which doesn't help when I want to speak with the people who instigated it. I have been told 'there is no one here who can help you with that today I'm afraid'. I have been told 'We do not discuss policy decisions with the general public'. I have basically been stonewalled and ignored.

I very much doubt I will get this policy changed within the three years that it will effect Me. I will however keep fighting to have it changed so that future foreign drivers don't have to face this slap down when they have bent over backwards to accommodate the requirements to become useful positive additions to American society and the American workforce.

Regards, and good luck with your driving and your visa claims,

Doug.

[TiffandDai 0]

I think it really depends on who the insurance company is. I work for an insurance company (who does business in NC) and have never asked someone how long they have had a 'US' license when I issue a NC auto insurance policy.

I talk to more immigrants/non-USC than probably a majority of other agents due to our clientele.

[JamalNTam 1]

Insurance in this country is crazy! We're moving from Arizona to Louisiana because my husband has military orders, and it is jumping from $587 per 6 months (for 2 cars and 2 people) to $1087 per 6 months. I also think it's disgusting that they even look at education - just because you dont have a BA degree doesn't mean your irresponsible!

[TiffandDai 0]

Insurance in this country is crazy! We're moving from Arizona to Louisiana because my husband has military orders, and it is jumping from $587 per 6 months (for 2 cars and 2 people) to $1087 per 6 months. I also think it's disgusting that they even look at education - just because you dont have a BA degree doesn't mean your irresponsible!

LA has a military discount program that you may qualify for if you are still in LA. It is a pretty hefty discount. I work for a company who issues policies for mostly military folks, so tell them that!

[brtlmj 0]

Foreign drivers are not higher risk, because anyone who really understands driving knows that driving is the same wherever you drive. It isn't about what side of the road you drive on or what the road signs mean.

Having driven in a couple of countries, both on the right and the wrong side of the road, I respectfully disagree. It takes a couple of weeks just to get your most basic reflexes right - and that is just the beginning.

And I stand by everything I wrote before - even though I dislike paying the high premiums. Driver's insurance is a big, well understood market, with a lot of competition. The insurance companies know exactly what their risks are and how to price them. If it was possible to charge less, some company would do so and others would have to follow.

However, if you are REALLY sure that you are being charged too much, have you considered self-insuring (if your state allows it)? For example, in California you can deposit a bond with the DMV and then legally drive without insurance.

[Dr. Obvious 49]

Insurance in this country is crazy! We're moving from Arizona to Louisiana because my husband has military orders, and it is jumping from $587 per 6 months (for 2 cars and 2 people) to $1087 per 6 months. I also think it's disgusting that they even look at education - just because you dont have a BA degree doesn't mean your irresponsible!

Don't take it personally. It is underwriting. For my first year back, insurance companies kept saying my credit was a negative factor. I have no idea what that meant because my score from all three bureaus was in the mid 700s when I came back. As soon as they were over 800, as they are now, the rates dropped substantially and my credit was no longer considered a risk factor. But I didn't think mid 700s was that bad, but what do I know, apparently.

[brtlmj 0]

Don't take it personally. It is underwriting. For my first year back, insurance companies kept saying my credit was a negative factor. I have no idea what that meant because my score from all three bureaus was in the mid 700s when I came back.

They look at a different score. It is based on the same data as the "usual" credit score (i.e. your credit history), but is calculated differently.

[Dr. Obvious 49]

Hmm, well that doesn't help. How do you know what to do to improve if you have no idea what they base it on? I mean, mine did anyway that seemed to go with my scores going a little over 800, but that could have been a coincidence or what?

Edited February 11, 2009 by Wacken

[brtlmj 0]

Not too much is known about credit scores other than the "generic" one. Here is an article you might want to read.

[TiffandDai 0]

Hmm, well that doesn't help. How do you know what to do to improve if you have no idea what they base it on? I mean, mine did anyway that seemed to go with my scores going a little over 800, but that could have been a coincidence or what?

What determines the price of my policy?

There are many factors that influence the price you pay for auto insurance. The average American driver spends about $850 a year. Your premium may be higher or lower, depending on:

Your driving record.

The better your record, the lower your premium. If you've had accidents or serious traffic violations, you will pay more than if you have a clean driving record. You may also pay more if you haven't been insured for a number of years.

The number of miles you drive each year.

The more miles you drive, the more chance for accidents. If you drive a lower than average number of miles per year, less than 10,000, you will pay less. For instance, some companies will give discounts to policyholders who carpool.

Where you live.

Insurance companies look at local trends, such as the number of accidents, car thefts and lawsuits, as well as the cost of medical care and car repair.

Your age.

In general, mature drivers have fewer accidents than less experienced drivers, particularly teenagers. So insurers generally charge more if teenagers or young people below age 25 drive your car.

The car you drive. Some cars cost more to insure than others. Variables include the likelihood of theft, the cost of the car, the cost of repairs, and the overall safety record of the car.

The amount of coverage.

Of course, like anything else, the more coverage you have, the more you pay. However, you may qualify for discounts.

Credit

Credit scores are based on an analysis of an individual’s credit history. These scores are used for many purposes such as securing a loan, finding a place to live, getting a telephone and buying insurance. Insurers often generate a numerical ranking based on a person’s credit history, known as an “insurance score,” when underwriting and setting the rates for insurance policies. Actuarial studies show that how a person manages his or her financial affairs, which is what an insurance score indicates, is a good predictor of insurance claims. Insurance scores are used to help insurers differentiate between lower and higher insurance risks and thus charge a premium equal to the risk they are assuming. Statistically, people who have a poor insurance score are more likely to file a claim.

Hope this helps!!

I found this at www.iii.org (Insurance Information Institute)

[JaEnglishGirl 34]

I am insured with State Farm.

My husband (USC) got a family policy and added me as his wife, they asked nothing about me apart from my age.

I had no driving experience in the UK, got my US driving licence under a year ago. The was of course no loading for inexperience.

[Bruder 0]

This is a problem in NC that isn't the case in other states. As I understand it in 2003 the North Carolina Rate Board decided that only driving experience in the US counted towards years of experience. That means that anyone coming to NC from a foreign country has the same insurance rate as a sixteen year old who is just starting out. This is blatantly unfair and places undue burden on individuals who have a host of other difficulties to overcome. Because it is only NC that refuses to accept foreign driving experience, this also seems arbitary.

By the way, I had an Indiana DL and had to take driving lessons and spend hundreds of dollars taking tests (that seemed no more difficult than the test I had to take to get my NC license). Talk about "geld-macherei."

[JeroenAndMichelle 28]

For those with these problems, see if you can get a record or letter from your old (foreign) insurance company. I forgot the exact name but it shows if you had any traffic accidents for the past few years or had any fines in the past years.

Also, if your current insurance does not want to go cheaper even with this form, try to see if you can be insured by AAA (triple A). If they are a bit more expensive than your normal premium, just think of it that they might be cheaper without the increased premium

When I arrived in the US myself, one of the first things my wife and I did was to add me on the insurance (triple A insurance) as I would be the main driver and they had no problem at all that I still had a foreign license, they didn't increase the premium. They did ask, however, if I could get a letter from my old Dutch insurance company, stating my driving habits as mentioned above, which I did and they were all happy with it.