Causey fires back at critics over dwelling insurance settlement

State Insurance Commissioner Mike Causey is countering criticism he received over last month’s decision to settle a request to raise insurance rates charged on rental properties for a second straight year.

“As the Insurance Commissioner, it is my job to protect consumers by keeping rates as low as possible and maintaining a solvent insurance market,” Causey said.

The Republican, who is running for a third term this fall, announced on May 30 he had reached an agreement with the North Carolina Rate Bureau that will lead to an average increase statewide of 8% for dwelling policies starting November 1.

“This saved North Carolina consumers $151.7 million per year compared to what the Rate Bureau requested, and allows North Carolina’s insurance market to remain stable and solvent,” Causey said in a statement issued Tuesday.

The rate bureau submitted a filing in July 2023 asking for a 50.6% statewide average rate increase for fire and extended coverage of dwelling policies, which are offered to non-owner-occupied residences of no more than four units, including rental properties, investment properties and other properties that are not occupied full time by the property owner.

All areas east of the sounds from Carova Beach to Ocracoke as well as Roanoke Island are in Residential Insurance Territory 110. Currituck, Dare and Hyde mainland areas are in Territory 130. Camden, Pasquotank, Perquimans, Chowan, Tyrrell and Washington counties are in Territory 150.

The eight-page settlement holds rates for fire building and contents in all territories, while raising extended coverage buildings 14.9% in Territory 110, 5.8% in Territory 130 and 2.5% in Territory 150. There is no change to the rates charged for extended coverage of contents.

According to Donna Creef, Government Affairs Director for the Outer Banks Association of Realtors, estimated rates for a dwelling policy of $400,000 with extended coverage to cover a frame structure with no deductible applied and no content coverage in Territory 110 will increase by an estimated $650 and in Territory 130 by $203.

Coupled with the $279 rate for fire coverage, that will bring the $400,000 policy in Territory 110 to $5,291. In Territory 130, where fire coverage is $525, that policy will run $4,238, Creef said.

The original request called for an increase of more than 75 percent on new and renewing wind and hail policies for vacation and full time rental houses on the Outer Banks.

It also would have hit those in Territory 110 the hardest for extended coverage of buildings (78.6%) and contents (54.5%), while Territory 150 would have seen the area’s highest increase for fire coverage of buildings (31.8%) and contents (18.3%).

In January 2023, Causey granted the Rate Bureau a hike that averaged around 10 percent statewide on dwelling policies.

Causey has reached a settlement in every request made by the Rate Bureau, both on property and auto insurance changes, since he was sworn-in as commissioner in 2017.

“Once again, he canceled a public hearing, so the insurance companies didn’t have to justify their higher rates,” said state Sen. Natasha Marcus, the Democratic nominee for Insurance Commissioner, in a fundraising email issued the day after the settlement was announced.

“It’s a sweet deal for insurance companies and a bad deal for North Carolina consumers,” Marcus said.

Marcus also said that the timing of Causey’s announcement, coming just before 5 p.m. on the same day that former President Donald Trump was convicted of 34 felony counts in New York, was underhanded.

“Causey’s sneaky move is a blatant attempt to deceive the hardworking families and business owners of North Carolina whose wallets are already getting squeezed,” Marcus said.

“This latest increase in dwelling insurance rates will hit both the folks who make a living from rental property and the people who rent from them,” Marcus said.

“Causey has shown, time and time again, that he is more interested in padding the pockets of his wealthy insurance industry donors than protecting the people he was elected to serve,” according to Marcus.

Causey countered on Tuesday that his predecessors were also inclined to settle requests.

“During the past 20 years, there have been eight dwelling and fire rate filings. Only one went to a hearing,” Causey said. “Settling and not going to court saves consumers and taxpayers money. Hearings are the exception when negotiations fail.”

Causey said that state law requires a public comment period on any request.

“This feedback that we receive is not the same thing as a costly public hearing,” Causey said. “The public hearing is a legal proceeding during which both the Rate Bureau and the Department of Insurance present arguments and evidence for or against a filing.”

The public hearing on the lastest dwelling request was scheduled for July 22, after it was originally postponed in April.

Causey has scheduled a hearing for October on a request to raise regular homeowners insurance policies by as much as 45% along the Outer Banks.

That request drew more than 25,000 phone calls, emails and letters from North Carolinians about the proposed rate hikes — including many of the state’s elected officials.

Well over 100 people spoke out against the proposal during a public hearing in April.

Among those who attended the hearing in Raleigh in person were Creef and OBAR CEO Willo Kelly, who have been at the forefront of battling the inequities in insurance rates our area has faced when compared to areas well inland.

The same week the dwelling settlement was reached, Causey announced he had rejected a request to raise mobile home insurance rates and has set that hearing for next April.

The industry is asking for the mobile home rate hikes over a three year period that raises fire insurance rates by more than 120 percent and casualty policies by over 80 percent in coastal counties by 2027.

Causey has tried to tamp down some of his critics on the coast, holding a forum in Manteo this past March where he stressed that his office had limited power over building code changes and insurance company business decisions in North Carolina that have unnerved homeowners, Coastal Review reported.

Causey has also been criticized for supporting legislation passed by the N.C. General Assembly that revamped “consent-to-rate” in 2019, which is an agreement between the customers and insurance companies that allow a higher rate to be charged.

That has been responsible for recent spikes in rates for some customers along the coast that went above and beyond the base rates negotiated between the Department of Insurnace and the Rate Bureau.

While Causey has been taking criticism for settlements, he has also come under fire after a friend and donor cost state taxpayers nearly $14,000 in hotel, meals and other expenses after being hired as the commissioner’s driver with a salary of over $84,000.

An investigation by The News & Observer found Roger Blackwell, 77, also had inconsistent job titles and accompanied Causey on long work trips to locations as far as New Mexico.

Another Causey ally and donor, John Woodard, was hired for what Woodard termed a “make-work” job at the Department of Insurance. He was fired last July.

In another fundraising email sent last week, Marcus claims Causey has taken over $250,000 in campaign donations from the insurance industry.

“Instead of protecting us, he’s been busy lining his campaign coffers with insurance industry cash,” Marcus said. “I am not accepting campaign money from the insurance industry because I don’t want to owe them anything.”

And Causey has rankled members of his own party in the legislature, firing three officials at the state fire marshal’s office last year after the General Assembly stripped Causey of the marshal’s job.