Coastal officials, including several from southeastern North Carolina, will appear in Raleigh today in opposition to the 30 percent rate-increase proposed for new or renewed homeowner insurance policies in counties like New Hanover, Brunswick and Pender.
That would be the highest individual increase statewide per the coast’s exposure to hurricane winds, though officials including Wilmington Regional Association of Realtors Governmental Affairs Director Kathleen Riely argue that non-coastal counties face plenty of risk, and that North Carolina’s methods for adjusting homeowner insurance rates are “antiquated” and unfair.
Riely addressed Wilmington City Council Tuesday night to explain ratemaking and what beach counties like this one have faced over the past two decades.
North Carolina’s rate adjustments generally start with the N.C. Rate Bureau (NCRB), an organization representing insurers that write policies in the state, she explained. Using risk models, it recommends changes to the N.C. Department of Insurance, which can approve, deny or negotiate them.
“North Carolina is unique in that we are the only state in the United States that has a rate bureau,” Riely told City Council, adding the rest use a free-market system.
According to information from the City of Wilmington, the latest proposed increase “comes after a 17.5 percent increase for coastal areas in 2009, in addition to rate increases in every rate cycle since 1992.”
“We are paying 163 percent more … in our homeowner insurance rates on the coast than we did in 1993,” said Riely, noting the Charlotte area is actually paying less.
“Who gets a decrease in their insurance rates?” a frustrated Riely said.
“It looks like there is a definite bias against the eastern strip of the state,” Councilwoman Laura Padgett said.
To rile the council further, Riely said that since 1986 only 26 percent of the claims paid for wind losses in North Carolina came from the 18 coastal counties while the other 82 counties incurred 74 percent.
Council that night adopted a resolution in opposition to NCRB’s latest proposal for increases. As filed it calls for a statewide average hike of 17.7 percent. The coast is set for 30 percent, the highest in the state. For the Charlotte area, 8.5 percent. The western, mountainous part of the state would see a 13.7-percent increase. (See related story.)
Without a challenge, the elevated rates would go into effect June 1, 2013, though the state’s negotiations with NCRB usually result in figures more lenient than those initially requested.
Today’s public hearing began at 9:30 a.m. and will continue until 4 p.m. in the Jim Long Hearing Room of the Dobbs Building, 430 N. Salisbury St., Raleigh.
The hearing is first of its kind since the state legislature in its last session amended law to give the public a chance to affect the rates. The public hearing was one of the new features. Additionally, until Oct. 19, persons can comment in writing to [email protected] or NCDOI, Attn: Bob Mack, Property & Casualty Division, 1201 Mail Service Center, Raleigh, N.C.27699-1201.
Contact Ben Brown at [email protected] or (910) 772-6335. On Twitter: @benbrownmedia
