5 On Your Side

Homeowner's insurance too high? 'Shop around, you might be surprised'

Posted September 10, 2014
Updated September 11, 2014

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— When was the last time you shopped around for homeowner's insurance? If it's been years, you might be paying too much.

A Garner couple reached out to 5 On Your Side to share their huge savings. They cut the cost of their annual policy by more than half.

It's all related to 5 On Your Side’s ongoing investigation of “consent to rate” letters that most homeowners will get form their insurer as their policy comes up for renewal. The bottom line is: if you haven't compared prices recently, you need to.

Joe and Paula Fox of Garner said they have paid Nationwide for homeowner’s insurance for years and never had a claim. In 2007, they signed a consent to rate form, not fully understanding it gives an insurer the ongoing OK to raise rates above the state-approved cap.

A 5 On Your Side investigation found the decades-old law was intended for high-risk customers. But now, a growing number of insurers are using it to bypass the rate change process.

“We originally started at $813 a year when we first signed our mortgage,” said Paula Fox.

Over the years, it has more than doubled, according to the Foxes:

  • 2008-09: $966
  • 2009-10: $1,370
  • 2010-11: $1,441
  • 2011-12: $1,564
  • 2012-13: $1,913
  • 2013-14: $2,090

“You feel cheated is what you feel,” Paula Fox said. “We finally got fed up. We paid a visit to a competitor.”

“We got the first round of quotes, and then we went to (Nationwide) and we’re like, ‘What’s going on?’” said Joe Fox.

The other quote was more than $1,200 lower. The Foxes took it back to Nationwide, and their agent beat it.

“I was thrilled at that. Then again, I was mad. Why couldn’t you have done this before?” she said.

Their initial bill of $2,090 is now $768 for the year – less than they paid nine years ago.

"You don't pay attention to it. It is what it is. You pay it and you go on, especially when it's part of escrow,” Joe Fox said.

“They're there to make their money, too. It's a business,” Paula Fox added. “Shop around. You might be surprised."

The Foxes also increased their deductible – a move that can save money. WRAL’s Monica Laliberte also shopped around after getting a “consent to rate” letter from a company she has been with for decades. Her annual savings was $785.

Consumer advocates say people should shop around every three years at a minimum.

Consumer Reports: Readers rank insurance companies

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  • da1200rey Sep 12, 2014

    shop around all you want while you can, because if NC doesnt get rid of the rate bureau, every company you go to will have CTR in the near future. And good luck at claim time with these off the wall companies you might be going to. I know we all want to save money, but there is a reason companies charge certain rates. All its going to take is another 2011 type storm year and half of these companies will be out of here anyway.

  • Tony Snark Sep 12, 2014

    We shopped around after getting a letter from geico/travelers and reduced ours by about 2/3.

  • vcartertr15 Sep 11, 2014

    View quoted thread

    I didn't say anything about a 250% increase over 9 years. I certainly would have left by that point. I was simply commenting on the above comments and noting that the stories that are supposed to be investigative are getting wrong information and misinforming or not giving enough info. It is important to tell the whole story, but yes said example is terrible. No one should wait that long when there have been no claims.

    Regulated doesn't mean perfect and there is still a ton of competition. There is still a ton of risk the companies take on so some houses and areas must take on a much larger percentage of the premium due to the degree of risk. Can't be fully regulated or controlled because then there would be no businesses, just government provided insurance, or just one company like with utilities a lot of times. And again, there is no control over the insured. You can change homeowners insurance at any time.

  • numskullcycling Sep 11, 2014

    View quoted thread

    You might consider this "misleading or oversimplifying". But when it comes to the point where you are being overcharged just so a company can make more and more money (that shows a 250% increase over a period of 9 years with ZERO claims)......IN A SUPPOSEDLY REGULATED INDUSTRY, it is greed. Pure and simple.

  • vcartertr15 Sep 11, 2014

    View quoted thread

    Just waaaaaaay oversimplifying insurance. There are hundreds of thousands of people in a pool. So your insurance and my insurance pays for the next guys total loss. I imagine you could take several thousand folks premiums and have trouble paying for 100 claims. And yes they are a business so have to make money too. The point is, that these articles or news specials mislead and oversimplify the issues.

    I will say a ton of money from top executives should certainly be dropped. CEOs and such of all large companies make tens of millions even when performance of the company is bad! Millions that could go elsewhere in the company.

  • 68_dodge_polara Sep 11, 2014

    View quoted thread

    So that's how it works, your insurance premium is paid just to reserve the ability to take out a loan co cover damages. Now that's a business model that you can't lose money with!

  • HintonJames Sep 11, 2014

    Consent to Rate (CTR) has been North Carolina law for over 60 years. The original intent of the legislation was to benefit both insured and insurers by providing a mechanism whereby high-risk insureds could obtain coverage - through higher than standard rates.
    What is now is an unintended aberration. Some insurance companies are using CTR as a "found" mechanism whereby they can circumvent the NC regulatory review and approval process, and independently increase rates - at will.
    The danger, beyond the circumvention of the regulatory process and consumer protection, is that it endangers thousands of North Carolinians by potentially putting insurance rates out of reach.
    For some, an insurance increase of 200%, 300% or 500% would force them to divest their mortgaged asset (i.e., property coverage required)
    I am certain this is not the intent of the CTR legislation. CTR does NOT exist every state. Until recently no one heard of CTR, but it is epidemic now. Contact your legislator

  • vcartertr15 Sep 11, 2014

    View quoted thread

    That's the way insurance works! It would go back down after 3 years. You have probably put in a lot of money over years, but they have to or they wouldn't have the money on hand to cover complete losses. I hope you wouldn't expect them to keep the rates down if you had a complete loss too. (Not saying you would, but I am hoping not.)

  • allareequal Sep 11, 2014

    Independent insurance companies are great, they do the shopping and comparing for you and can save you a lot of $$. I just switched my auto and home to Brightway Insurance in Cary, they are independent, sent me several quotes and saved me $$ on all my policies for the same coverage!

  • Wade Station Sep 11, 2014

    It's extremely easy to answer why the rate with Nationwide changed. ALL insurance companies have multiple insurance companies under their "umbrella". Every 3-4 years, the insurance company comes up with a new company under their umbrella. The new company usually has lower rates than the older company. All the policies in the older company stay in the older company, only new business goes in the newer company. And then what the insurance company does is raise the rates in the older company a little each year because they know that more than likely that customer that is in that old company is not a shopper. I guarantee you that the person in this article that had insurance with Nationwide and then got a lower rate has their policy with a different Nationwide company than they originally did