Local News

Homeowner insurance rates to rise 4%

Posted December 18, 2008 11:57 a.m. EST

— Insurance Commissioner Jim Long signed a settlement agreement with homeowners insurance companies Thursday, allowing rates to increase by an average of 4.05 percent.

The new rates, which become effective beginning May 1, call for premiums to go up by 5 percent in Raleigh and Durham and by 4 percent in Fayetteville.

Rates in most Triangle counties are expected to increase by 2 percent, and homeowners in Person, Granville, Vance and Warren counties might even drop by 3 percent.

The North Carolina Rate Bureau, which represents all of the homeowners insurance companies doing business in the state, had requested a 19.5 percent average rate increase.

“There has been a lot of speculation surrounding this homeowners rate filing, but I feel that we’ve reached a settlement that is fair to both consumers and insurance companies in North Carolina,” Long said in a statement. “No one likes to see their insurance rates go up, but the industry made a strong case for allowing some increases this year. The silver lining is that most consumers won’t see nearly the increases that were initially proposed.”

The settlement also realigns several insurance territories along the coast so that homeowners who live farther inland pay less for insurance. Long said that makes sense because these homes have less exposure to the impact of a hurricane.

The increase will be the first since May 2007, when homeowners insurance rates went up 5.4 percent.

The approved rates are the highest allowable rates that companies can charge. Companies often offer discounts, which can lower what homeowners pay, he said.