Sounding an Alarm on Homeowner’s Insurance

OBAR’s Willo Kelly rallies opposition to proposed 30% increase

Homeowners on the barrier island portions of Dare, Currituck and Hyde Counties could face as much as a 30% hike in their insurance rates under a North Carolina Rate Bureau filing, Outer Banks Association of Realtors Chief Executive Officer Willo Kelly warned an audience of about 30 people at a League of Women Voters-sponsored forum on Feb. 13.

Based on $200,000 of dwelling rebuild value with a $1,000 deductible, the proposed rate would mean a hike in insurance premiums from the current rate of $2,383 to $3,098 in the beach areas. Inland areas of Dare, Currituck, Hyde and Pamlico Counties face a potential 25 percent increase — which would translate into a nearly $500 increase based on the same values.

Kelly, a longtime watchdog and advocate for the region when it comes to property insurance concerns, said that the N.C. Department of Insurance (DOI) will consider the Rate Bureau’s requested increase following the close of the public comment period on Feb. 26. Rates would go into effect Oct. 1.

At the conclusion of the public comment period, DOI Commissioner Mike Causey can approve the rate filing, do nothing – which, in essence puts the proposed rate into effect — or deny the filing all together. Often, as was the case last year, a settlement agreement is reached between Causey and the Rate Bureau.

North Carolina is one of the few states that has an elected insurance commissioner and is the only state that has a Rate Bureau, which is made up of all the companies in the state that are collecting insurance.

Last week’s forum, held at the Kill Devil Hills Town Hall, served as a kind of rallying call to encourage residents to voice their opinions before that Feb. 26 date. “Please express to the DOI that the proposed rate increases…are excessive, are unwarranted and unfairly discriminatory,” Kelly urged. “We need to be heard.”

The proposed increase, filed on Dec. 21, would affect year-round resident policyholders, wind- only policyholders, as well as condo and renter policyholders, and comes on the heels of a prior year increase of 5.5%, which went into effect in October 2018.

“That’s only four and a half months ago that new rates went into effect,” stated Kelly. “There has not been enough time to thoroughly evaluate the adequacy” of the recently instituted rate increase.

She argued that the rising cost of insurance could have significant impacts on housing here. “The rising cost of insurance impacts the affordability of housing…not the ability to buy a house but the ability to maintain your mortgage,” Kelly asserted at the opening of her presentation. “Those affected by this homeowners’ insurance rate filing — they are the people who live in our neighborhoods year-round.”

Kelly also stressed that the DOI should not consider a filing by the Rate Bureau until the department has an accurate grasp on how many policyholders are paying premiums based on having signed consent to rate forms. Consent to rate is a practice insurance companies use that allows them to charge as much as 250% more than the current rate, meaning premiums can go up without a rate change.

Kelly, who provided a number of talking points for commenters to employ, urged audience members and anyone owning property in North Carolina to attend the public comment forum at the Department of Insurance on Feb. 26, or submit comments via email or mail.

“I think we need to be contacting [Dare County Board of Commissioners] Chairman Bob Woodard and maybe some town officials to see if we can’t get a caravan together to go to Raleigh that day to let our voices be heard,” Kelly said.