Earlier this year, insurance companies requested a 42% average increase for homeowners insurance in the state, but that request was rejected by the state Commissioner of Insurance Mike Causey. Under state law, the request must be approved by the commissioner or otherwise be decided by a state Department of Insurance hearing officer.
Insurers say the hike is necessary to adjust for inflation and heightened risks due to climate change, while some year-round residents on the coast, who pay the highest premiums in the state, say they're already struggling to insure their homes and that an increase would strain them even more.
Causey spoke yesterday at an event on Harkers Island. Many people at the event said they're frustrated with the insurance situation for communities on the coast.
THE PROPOSAL: The North Carolina Rate Bureau, an agency created by law that represents property insurance companies in the state, submitted the proposal on January 3. Under state law, insurance companies are required to ask for increases on base rates through the NC Rate Bureau.
The 42% figure is the average increase statewide. Folks on the coast face steeper increases. Beach areas in Brunswick, Carteret, New Hanover, Onslow and Pender Counties would pay double their current premiums under the proposed rate increase. Coastal areas of Carteret and Onslow Counties face a 70% hike, while people in Jones, Craven, Beaufort and Washington Counties could see a 25% increase.
The proposal is just that — a proposal — and it's likely to be negotiated down, as in past filings.
WHAT'S NEXT: Commissioner Causey will likely reject the proposal. He has until late February to decided, and if rejected, set a hearing date. In past filings, though, NCDOI and NCRB settled outside of court. The NCRB is likely to contact the Department of Insurance before the end of February to begin that process. In the meantime, Causey's scheduled a public hearing in Raleigh on Monday.
PAST NEGOTIATIONS: "Every rate request that's come to me, I've said no," Causey told the crowd at the Waterfowl Museum on Harkers Island Wednesday. "But the insurance companies can say can we talk about a settlement."
Causey's been state insurance commissioner since 2017. The last time there was a homeowners increase was 2020. Then, insurance companies asked for a 24% statewide average increase, but later settled for just an 8% average. Beachfront and most coastal properties saw a 9.8% increase in the 2020 negotiation.
Causey anticipates settling again. At what rate though will be hashed out in negotiations.
It's important to note that the filings and negotiations are over the base rate. Some companies hardly deviate from those rates, while others utilize what's called "Consent to Rate" to increase their premiums.
Some homeowners have received bills that show higher premiums than past statements. Consent to Rate allows companies to charge above the approved rate but only with the homeowner's consent. That consent is expressed through payment on the higher bill. Withholding consent, through nonpayment however, means the homeowner will likely be dropped.
A FRUSTRATING SITUATION: The proposed hike comes after some companies have pulled out of coastal communities. Last year, Nationwide and Frontline chose not to renew homeowners' policies east of I-95. That left many scrambling to find coverage, like Kris from Pine Knoll Shores.
"I was notified two months in advance that it was coming, so it was a decision they had made," she said.
She was able to find coverage through the NCIUA, an insurance market of last resort run by the state. More than 60% of insurance policies along the coast in Carteret County down to Brunswick County are insured through the NCIUA, highlighting the lack of options in the private market. Under state law, the NCIUA must match the rates set by the NCRB
