Georgia Navigator Practice Exam

What can insurance companies charge at most compared to another insurer?

1. 25% higher

2. 50% higher

3. 75% higher

4. No limit

The correct answer is: 50% higher

The correct answer indicates that insurance companies may charge at most 50% higher than another insurer. This regulation is typically in place to ensure competitive pricing in the insurance market while protecting consumers from excessive rate increases. The cap on how much more one insurer can charge compared to another helps maintain a balance within the marketplace, ensuring that no single provider can dominate by setting disproportionately high premiums. This practice promotes fair competition, encouraging insurers to offer reasonable rates to attract and retain customers. It also ensures that consumers have options without the risk of being subjected to unjustifiably high premiums. Understanding this limit is crucial for consumers and agents when they compare insurance products and seek the best possible rates.