Who is North Carolina’s Safe Driver Incentive Program actually protecting?

While keeping our roads safe is a noble cause, I have recently come to question whether North Carolina’s Safe Driver Incentive Program is actually protecting other interests.

Created in 1957, the SDIP was supposed to give North Carolina drivers a financial incentive to drive safely on our state’s roads. As stated in the N.C. Department of Insurance brochure, “This plan allows automobile insurance companies to charge higher premiums for those drivers who have violated traffic laws by practice unsafe driving habits such as speeding, following too closely, passing a stopped school bus or driving while impaired.”

It’s certainly reasonable for individuals charged with one or more of these violations to pay more for their insurance coverage. Indeed, assessing points against individuals convicted of moving violations or unsafe driving practices that translate into an increase in insurance premiums seems more than fair.

Recently, though, I was pulling my car into my garage after a hard day at work. Unfortunately, I was preoccupied and ended up scraping the driver’s side of my car against the side of the garage and caused some significant scratches along the left passenger door frame and bumper. After chastising myself, I thought, “Well, no one was hurt, and that is what insurance is for – to cover these little mishaps that life brings.” Or is it?

The $1,800 limit

It was only after I had filed a claim with my insurance carrier – State Farm – that I discovered a little known element of the Safe Driver Incentive Program. Not only does this program assess points based on convictions, it also looks at total cost of damages, which need to be less than $1,800 (and that is before your deductible is applied)! Anyone who has gone to a body shop lately knows the average cost to repair minor scratches and dents (which often require a three-part paint job) can quickly exceed $1,800.

My original estimate, of course, exceeded the $1,800. So by having filed a claim, I have found out that I will have two points assessed against my record and that my annual premiums will increase upward of 45 percent over the next three years. So although I had no prior convictions or at-fault accidents, no moving violations, no unsafe driving practices and no bodily injury, I have been told there is nothing that can be done other than accept the points and increase in my premium.

When I researched the SDIP, I found that the $1,800 damage limit was last adjusted in 2004. I immediately tried to contact state Reps. Dana Bumgardner and Mitchell Setzer as well as Sens. Tom Apodaca and Wesley Meredith who sit on the Insurance subcommittees. I also contacted individuals at the N.C. Department of Insurance and the N.C. Rate Bureau who stated that while they receive many similar inquiries they are unable to assist and referred me back to legislature. I have also reached out to state Rep. Yvonne Holley and Sen. Chad Barefoot requesting assistance in reviewing the damage limits. Unfortunately, I have not received response from any of these elected officials.

Inflation has not stood still over the past 10 years, so does it make sense that a damage limit should? The Consumer Price Index shows that, on the average across all expenditure categories, inflation has increased an average of 3 percent each year. The index actually has a category specific to Motor Vehicle Body Work, which has closely mirrored the same 3 percent increase each year.

It makes one wonder about the benefit of a plan that penalizes insured consumers for submitting claims for damage to their vehicles that resulted from no unsafe driving practice or violation. Does the plan as originally conceptualized more than 50 years ago still meet its objective and goal? Or is there perhaps some benefit to certain large insurers or individuals to retain an artificially low damage limit threshold?

This story was originally published October 7, 2015 at 6:33 PM with the headline "Who is North Carolina’s Safe Driver Incentive Program actually protecting?."