Calling Rate Request Excessive, Insurance Chief Sets Hearing
A hearing has been set for the end of summer on a proposed increase in homeowners insurance rates that could be more than 30 percent in coastal counties just a year after rates jumped by 15 percent in some areas.
The request covers policies for residential property, tenants and condominiums.
State Insurance Commissioner Mike Causey has called the increase excessive and says data does not support another hike after the one that went into effect last fall.
Written comment on the proposal is open through Tuesday. The hearing has been scheduled for Sept. 4 in Raleigh.
The North Carolina Rate Bureau submitted the request to the Department of Insurance on Dec. 20. The filing reflects an overall statewide average increase of 17.4 percent for homeowners, renters and condominium rates.
However, NCRB has requested a rate increase of 30 percent in the homeowner rate in the beach areas of Currituck, Dare and Hyde counties and a 25 percent increase in the homeowner rate in the inland areas of Currituck, Dare, Hyde and Pamlico counties.
Data in the filing indicates the need for a rate increase of up to 94 percent; however, the Rate Bureau decided to cap the increase at 30 percent to reduce the impact on policyholders. Filed tenants (renters) and condominium rate increases are between 5 percent and 15 percent. Homeowner rates are based on $200,000 coverage, protection class 5 with frame construction.
A portion of the homeowner rate is for wind; therefore, the filing will have an impact on Wind Only policies, including policies in the NCIUA, which has commonly been referred to in the past as the “Beach Plan.”
Because the wind rate makes up the majority of the overall homeowner rate, an Outer Banks wind only policyholder may be facing a premium increase of over $700 with $200,000 of coverage.
Below is a breakdown of the filed rate changes for eastern NC.
| Territory | Territory Definition | % Filed Homeowner Rate Change | 2018 Current Rate | 10/1/2019 Effective Filed Rate |
|---|---|---|---|---|
| 110 | Beach areas of Currituck, Dare & Hyde Counties | +30% | $2,383 | $3,098 |
| 120 | Beach areas of Brunswick, Carteret, New Hanover, Onslow & Pender Counties | +30% | $2,794 | $3,632 |
| 130 | Coastal areas of Currituck, Dare, Hyde & Pamlico Counties | +25% | $1,516 | $1,895 |
| 140 | Eastern areas of Brunswick, Carteret, New Hanover, Onslow & Pender Counties | +30% | $1,947 | $2,531 |
| 150 | Coastal areas of Beaufort, Camden, Chowan, Craven, Jones, Pasquotank, Perquimans, Tyrrell & Washington Counties | +15.5% | $1,278 | $1,476 |
| 160 | Western Coastal areas of Brunswick, Carteret, New Hanover, Onslow and Pender Counties | +20% | $1,375 | $1,650 |
Meanwhile, mobile home owners could also be facing an insurance rate increase after a filing this week. The proposal calls for a statewide average 19-percent increase for mobile home casualty policies and an average 19.9-percent hike for mobile home fire policies.
A breakdown by geographic area of the proposed increase has not yet been made available. Unlike other coverage, mobile home class policies also include flood insurance. If granted, the rate hikes would begin next February.
Dates for a comment period and possible hearing have not been set.
Of course it is ridiculous. What is insulting is the insurance companies come in with a completely insane percentage increase and know it will be scaled back. I have no trust for companies do business this way. I have not seen where any of the insurance companies have been on the brink of bankruptcy due to claims. Even more troubling is them setting the price of wind and hail even though they do not offer it. How can you set the price for something you do not sell?