State News

Insurers make case for big rate hike

Posted October 20, 2014

— North Carolina's insurance commissioner opened a hearing Monday on a request from insurers that want to increase homeowner policy prices by an average of more than 25 percent in January.

The North Carolina Rate Bureau, the independent agency that represents insurers, filed paperwork in January seeking changes to premiums for homeowner policies ranging from a 2.7 percent decrease to a 35 percent increase, varying by territory, officials said. The insurers also requested revisions to the current geographic rating territories.

"What we believe is that the premiums being charged now are inadequate," said Ray Evans, general manager of the Rate Bureau.

Under the proposal, the price of a homeowner policy in Cumberland County would go up almost 34 percent and by about 33 percent in Wake and Durham counties – although only 25 percent in Raleigh and the city of Durham. Homeowners in Chatham and Orange counties would see almost an 18 percent increase in their insurance policies.

"That's what the losses say it should be," Evans said.

Insurance Commissioner Wayne Goodwin said he is "appalled" by the proposal. His office said he called the hearing because the proposed rates appear to the Department of Insurance to be excessive and discriminatory.

"Roughly a 10 percent decrease is what (DOI officials) think is justified, based on the actual data," said Kerry Hall, a DOI spokeswoman.

Experts from the Rate Bureau and the Department of Insurance will present their cases to Insurance Commissioner Wayne Goodwin over the next few weeks.

More than 10,000 public comments were submitted in January, and 25 people spoke during a hearing held that month.

"By law, the commissioner's job with homeowner's insurance rates is to make sure the rates are not excessive, that they're not unfairly discriminatory, but also that they're adequate so that insurance companies can pay out claims, particularly in the case of a large-scale disaster," Hall said.

A decision is expected by the end of the year.


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  • Big Mike Oct 21, 2014

    We've paid about $35,000 in premiums over the years and have had about $16,000 in claims due to storm damage. I think they've made enough profit on us...

  • Gatsby Oct 21, 2014

    View quoted thread

    What if 75% then quit the mortgage payments? There is a way to end the abuse but it takes a village.

  • NeverSurrender Oct 21, 2014

    View quoted thread

    That 75% of residents would find themselves paying for a very expensive (often 3-6x!) dwelling-only policy that would be automatically added by their mortgage company which would be the only one benefiting from the policy.

    Would I have loved to tell the insurance company where they could shove that form? Certainly. However, when you have ten days to decide and six other insurers are all quoting even higher which would have required signing consent to rate wasn't much of a choice.

    Face facts...the insurance companies have just broken the market even worse than it already was in order to neuter the Insurance Commissioner who is effectively rolling over and allowing them to do so.

    They know full well they will have a critical mass of consent to rate forms that were signed under duress by the end of the year and they won't even have to sugarcoat telling Mr Goodwin to pound sound when he tries to disapprove a rate increase.

  • Gatsby Oct 21, 2014

    Seriously...what would happen if even 75% of NC residents refused to sign consent to rate forms? Could the mortgage companies foreclose on all of them for lack of insurance? I think not...something would have to give. I wish the Rev Barber would step into this fight...Man knows how to get some press coverage.

  • Arthur Raleigh Oct 21, 2014
    user avatar

    My home owners insurance has doubled in the past few years. Ridiculous!

  • cruzinlong Oct 21, 2014

    View quoted thread

    Did you just return from Colorado also?
    Fran DID hit inland, Raleigh area also and most that had insurance were covered by said named storm.
    I would like to know also, why is it some parts of our coast will see an actual DROP in rates while some other coastal areas will see only an 8-10% increase in the proposed rates?
    Looks like the inland folks will be taking a much larger hit than most NC coastal areas.
    See over on the left per this article for the proposed rates on
    "Regional breakdown of proposed insurance increases".

  • abbott134 Oct 21, 2014

    View quoted thread

    Wrong. Try to get a homeowners policy thru Farmers or AIG. They have pulled out of NC due to being on the hook for the underfunded beach plan. That's right when the big one hits the companies are on the hook for what ever the beach plan can't play to the tune of their market share of the NC homeowners market. Farmers and AIG said the heck with that and have pulled out. The rest that have stayed have increased rates to cover the expected loss in relation to their market share. You should be asking yourself who has underfunded the beach plan over the last 30 years. Like we don't already know.

  • rebelyell57 Oct 21, 2014

    View quoted thread

    I spoke with my insurance company yesterday about what led to the increase. I told the insurance representative there had not been any big events for claims in NC like hurricanes. He said that there have been alot of small claims which have run up the rates. He also said that insurance companies only make a profit of one cent on the dollar...1%. I told him I don't believe it.

  • Gatsby Oct 21, 2014

    View quoted thread

    I agree...Its a dumpster fire that the insurance companies wants to bleed even more of our hard earned cash but I am glad the news is shining light on it.

    Do not sign the consent form...if you do you have just waived any and all opposition to whats about to happen.

  • sww Oct 21, 2014

    What are the big claims that happened recently in the Triangle that would lead to a big increase? I can't recall any disasters here.