A public hearing began Monday to determine whether an average 42.2% increase in homeowners insurance rates requested by the North Carolina Rate Board (NCRB) will be granted later this year.
The NCRB represents private insurance companies seeking increases.
It comes at a time when many North Carolinians are feeling the pinch of rising costs, not just due to rising inflation in recent years, especially residents in the western part of the state who are trying to get their hands on a piece of the money. That’s true for me too. Their lives changed after Hurricane Helen destroyed and even devastated much of the area.
NCRB attorneys and staff, as well as North Carolina Insurance Commissioner Mike Causey, presented arguments and evidence for and against the rate hike at the Department of Insurance’s offices at 3200 Beechleaf Court in Raleigh.
The request was made in January and the NCRB wanted the hike to come into effect on August 1.
Numerous homeowners and others across the state voiced their concerns in public comment forums and via email and mail on Jan. 22. Causey scheduled the hearing after a bipartisan group of North Carolina state legislators, led by Republican Rep. Greg Murphy (NC-03), asked him to deny the NCRB’s request.
As expected, no one was in favor of the increase, which could rise to 71.4% in coastal areas like Swansboro, Onslow County, and 99% in places like Emerald Isle.
People living in mountainous areas are likely to see the lowest growth rates, between 4% and 20%, although that number may change depending on the extreme flooding conditions seen in the region from Helen.
Mr. Causey said in February that he had heard that insurance companies were also having trouble, with claims being paid out more than they were accepted.
“I heard from one Farm Bureau agency owner last year that he was paying $112 in insurance for every $100 he received in premiums. We know the homeowner market is tough. So it’s not a sustainable path,” Cosey said. “But when we listen to groups like AARP, we are reminded that the increase in Social Security cost-of-living adjustments is only 3.2%, which is below the average of 42%.”
He added that he hopes insurers strengthen their financial belts and step up efforts to contain expenses.
“Insurance companies have to do a better job of rooting out fraud and reporting fraud,” Causey said. “Our office is committed to combating insurance fraud that drives up insurance premiums, including roofing contractor fraud and many others.”
Department of Insurance General Counsel and Public Hearing Officer Amy Funderburk heard from Rate Bureau Attorney Mickey Spivey that homeowners’ insurance rates in North Carolina have declined due to inflation and the storm that hit the state. He said it was “grossly inadequate.”
In November 2020, NCDOI received a request from the NCRB for a 24.5% increase in homeowners insurance rates. This application resulted in a settlement between Koji and NCRB with an overall average interest rate increase of 7.9%.
Mr. Coursey’s opponent in next month’s general election, state Sen. Natasha Marcus (D-Mecklenburg), held a press conference yesterday outside the Health Department’s headquarters.
He has criticized Mr. Causey’s performance during his tenure, including the rate hikes granted during his tenure.
The hearing is expected to last several weeks. State law gives the insurance commissioner 45 days after the hearing to issue an order.
