| March 7, 2013
Homeowners’ insurance rate hike agreement will slam coastal counties
Carolina Department of Insurance announced earlier this week that
Commissioner Wayne Goodwin has signed a settlement agreement with
homeowners’ insurance companies, allowing an overall statewide average
rate increase of 7 percent, varying by territory and form, beginning
By IRENE NOLAN
The insurance companies, represented by the North
Carolina Rate Bureau, had requested an overall statewide average rate
increase of 17.7 percent on Oct. 1, 2012. The difference between the
requested and settled rates amounts to $237 million in savings to
However, the rate request will have a much larger impact on coastal counties.
the beach areas of Dare, Hyde, and Currituck counties, the Rate Bureau
asked for a 30 percent increase and got 17 percent under the settlement.
On a $150,000 policy in these counties, homeowners’ insurance costs would rise from $2,122 to $2,759.
On the other hand, Winston-Salem and Greensboro will have an increase of 1.1 percent and Charlotte, 8.4 percent.
am very disappointed in the rates settlement announced by Commissioner
Goodwin today,” said state Rep. Paul Tine, a Democrat who represents
several coastal counties, including Dare and Hyde. “While our beach
communities received a 17 percent to 19.8 percent increase, more
populated areas received as little as 1.1 percent.
data does not support the assertion that inland residents are paying
for the losses of coastal communities,” Tine added in his statement.
“However, that assertion appears to be guiding the decisions made in
our legislature and at the Department of Insurance. Our economy in the
East is suffering while our cost of living continues to rise. It is
long past time that we develop a fair rate system that is based in
historical data, not conjecture.”
Willo Kelly, who oversees
government affairs for the Outer Banks Home Builders Association and
the Outer Banks Association of Realtors, issued a media release as
president of NC 20, a consortium of 20 coastal counties.
the settlement agreement may represent a softer blow to coastal
homeowners’ insurance policyholders than prior rate settlement
agreements and what was originally proposed by the N.C. Rate Bureau,”
Kelly said, “NC 20 maintains that the rate increases are
unwarranted and unjustified, especially given N.C. DOI's statements
included in the Notice of Hearing. NC 20 was hopeful that the
hearing would be held, thus allowing further public
transparency of the rate making process and a better understanding of
how our homeowners’ insurance rates are determined.”
the request for an increase by the Rate Bureau, The North Carolina
Department of Insurance asked for public comment and set a
hearing on the issue, which was to begin on June 3.
Some 9,000 comments were received, but the Department of Insurance then decided that a hearing would not be necessary.
Department of Insurance experts spent months studying the insurance
companies’ request, it became apparent that some increase was
justified, largely due to the steadily rising cost of reinsurance
related to hurricane risks and ongoing concerns regarding
availability,” according to a media release issued by the department on
Monday. “In order to minimize the increase, the Department of Insurance
elected to settle on rates, eliminating the need for the hearing
scheduled for June 3.”
“Homeowners' insurance is a very complex
issue. We face a great challenge in making sure that it is not only
affordable, but available, to consumers across the state,” said
Insurance Commissioner Wayne Goodwin. “I feel this settlement helps
strike that balance, and I am pleased that the increase will be
significantly smaller than what insurers originally requested.”
last homeowners’ insurance rate filing occurred in 2008 when the
insurance companies requested a 19.5 percent statewide average
increase. A settlement agreement allowed for a 4.05 percent statewide
average increase to go into effect in May 2009.
FOR MORE INFORMATION
to see a breakdown of the homeowners’ insurance rate revisions by
region on the N.C. Department of Insurance settlement with the Rate