| April 8, 2013
Bills, petition target increase in homeowners’ insurance ratesRep.
Paul Tine, a Democrat who represents Dare, Hyde, Beaufort, and
Washington counties, along with Reps. Susi Hamilton (D – New Hanover),
Frank Iler (R – Brunswick), and Jerry Dockham (R – Davidson) submitted
House Bill 519, Property Insurance Rate Making Reform, last week.
purpose of the bill is to bring some clarity to the rate making process
so that additional reforms can be made in the future, Tine said in a
“We are not on the same page when it comes to how
our rates are made on homeowners’ insurance in this state,” he
said. “The inland counties think they are paying for losses on
the coast, the coastal counties feel they are paying more than their
fair share, and we need to all have a better understanding of what is
really going on.”
The bill would require the companies to submit
historical data on previous losses as a basis of comparison. Any
company wishing to use modeled data would have to present two
“Computer models take into account a lot of data
from weather patterns, to building codes, to the types of trees you
have in the area to develop a likelihood of future loss,” stated Tine.
“It’s very easy to come up with different conclusions based on the
different models used. We need more than one model so that we can
compare the conclusions.”
There is also a provision that would
allow for the North Carolina Commissioner of Insurance to require
additional statistical analysis based on the historical information
presented and the conclusions of the models.
bill would require that every policyholder in the state would have both
the wind and hail rate and the property rate shown on his or her
bill. This information could then be easily and clearly compared
between regions by policyholders and advocacy groups.
is still expected on this bill in committee and when it reaches the
floor. Tine said that several interested parties were consulted
in the crafting of the bill to try and limit any unintended
consequences. The Commissioner of Insurance and his department,
the Coastal Caucus, NC 20, and the insurance companies themselves all
“This bill is designed to give us a
chance to pass it into law,” said Representative Tine. “It would
help the whole state to bring more sunshine to the rate making process
and have more tools in the hands of the commissioner to fight for fair
and equitable rates.”
This bill is bipartisan in the House and there is a companion bill by Sens. Norman Sanderson and Bill Cook in the Senate.
bill has been referred to the Committee on Insurance in the House,
which is chaired by Dockham, one of the primary sponsors of the bill.
a related effort to fight the homeowners’ insurance rate increase along
the coast, Outer Banks grassroots volunteers have collected thousands
of signatures on a petition condemning an increase in homeowners’
insurance rates announced last month by state Commissioner of Insurance
The petition calls for government officials to overturn the decision and to investigate it.
Head home owner Ed Beckley wrote the petition and used broadcast e-mail
to send it out to his friends. Members of the Outer Banks Tea Party
backed it by doing the same thing. Beckley said the time has come to
deliver the results to the governor and legislators to make it clear
this was not a fair decision.
On March 5, recently re-elected
Commissioner Goodwin signed a settlement agreement with the insurance
companies, allowing an overall statewide average rate increase of 7
percent, varying by territory, beginning July 1. Beach areas are
specifically targeted, and the Outer Banks could see as much as a 20
percent increase, Beckley said.
“This is not good governing,” he
said, explaining that “the insurance commissioner received the request
for an increase in October 2012, and he scheduled a hearing for June 3,
2013. After his re-election, Goodwin decided to settle the matter on
his own, without airing the facts for and against such an important
Beckley said there is a perception that coastal areas
are the primary cause of wind-borne damage costs, especially during
hurricanes, and, therefore, people who live on the coast should pay
more for wind insurance. He said research and evidence is available to
counter that idea and to show that water-borne damage caused by storms
both at the coast and inland is the real cause. And those costs are
related to federal flood insurance coverage, not homeowners' wind
“The insurance commissioner did not allow such
research to be heard,” and his solitary decision is un-American. “Where
was our representation?” he asked. “We want to see the figures!”
petition calls for the governor, legislators, and the insurance
commissioner to adhere to due process, to negate the increase by
convening a hearing immediately, and for the governor and legislators
to investigate the insurance commissioner's motives.
The petition is also currently circulating in the southern coastal areas of North Carolina.
want to understand why North Carolina's East Coast is condemned to pay
more than its share per actual historical payouts to property owners
due to wind and hail damage, compared to other areas of the state,”
Beckley also noted that parallel bills were filed
April 2 in the state House and Senate relating to how the insurance
commission should deal with rate requests in the future. Local Rep.
Paul Tine is a primary sponsor of House bill H519, and local Sen. Bill
Cook is a primary sponsor of S690.
Beckley said those who are interested can go to http://www.ncleg.net/gascripts/BillLookUp/BillLookUp.pl?Session=2013&BillID=S690 to see the text of these bills.
He said locals should contact Cook and Tine to provide their input about the petition and these bills. Tine's email address is [email protected], and Cook's is [email protected].