What To Know About Your 2018-2019 Commercial Auto Renewal
Posted by Laura Thomas on August 29, 2018
As trusted advisors, our goal is to share updates as they pertain to all aspects of our clients’ insurance policies. We have received a letter from the North Carolina Reinsurance Facility, part of the North Carolina Rate Bureau, regarding a commercial auto surcharge that you might not notice on the bill but will increase your premium. If you have an auto policy for your business, there will be a new surcharge on your renewal for 2018-2019 and the following year. Here’s what you need to know.
- What it is
The North Carolina Reinsurance Facility (NCRF) is requiring a Commercial Auto loss recoupment surcharge on all NC Commercial Auto liability policies beginning October 2018. This includes policies by all carriers through all agencies.
The loss recoupment surcharge is intended to recover operating losses the NCRF faces due to ceded commercial auto business. Ceded business refers to policies reinsured by the NCRF for risk of loss. This includes policies providing auto liability (both bodily injury and property damage), medical payments, uninsured motorist coverages, and underinsured motorist coverages.
- The cost
Implemented over two years, the total surcharge will be 16.23% of the liability portion of the premium. For a new or renewed commercial auto policy, effective dates between October 1, 2018 and September 30, 2019, the surcharge amount will be 7.86%. Beginning October 1, 2019, an additional 8.37% will be included on the bill. This will not be shown as a separate charge, but will be part of the premium charges for bodily injury and property damage liability. For example, a business with a $3,000 auto liability premium would see their liability cost this year increasing by $236 and next year an additional $251.
- How to proceed
As the surcharge is state-wide, it is unavoidable across carriers. At this point, it is best to prepare for the staged surcharges. We are watching this update to see how the carriers respond to the state increase. If you have any questions about your policy, please contact your account manager by email or by calling our office at 828-328-5671.