Next month’s scheduled hearing on a proposal to raise homeowner insurance rates across North Carolina–with the southeast coast again seeing the largest spike–has been postponed.
The new date is Oct. 20, 9 a.m., in the Jim Long Hearing Room on the third floor of the Dobbs Building in Raleigh on 430 N. Salisbury St.
The request for increases comes from the private insurance industry in North Carolina, represented by the N.C. Rate Bureau.
For New Hanover, Brunswick and Pender counties, the Rate Bureau is asking the barrier islands’ base rates to rise by 35 percent. Depending on location, mainland homes in the area could see an increase of 35 percent–the highest in the state–or a decrease of 2.7 percent–the most lenient proposed outcome.
The statewide average increase would be 25.3 percent, according to the N.C. Department of Insurance (DOI), whose commissioner has the final say. He can grant, deny or approve a modified version of the Rate Bureau’s request.
The insurance industry has argued that homeowner rates, as they are currently, are falling short. The last round of increases, in mid-2013, were worth $237 million less than what the industry wanted.
“Although the rate level, particularly on the coast, is still inadequate, the Rate Bureau continues to work towards the rate adequacy the industry requires,” Roger Batdorff, chairman of the Rate Bureau Governing Committee, said in the agency’s 2013 annual report.
The coast is routinely marked for the highest of increases statewide because the Rate Bureau’s models deem it the most at risk to Atlantic storm damage.
“The hurricane loss potential on the beach and coast is about 10 times higher than that of the middle of the state and over 50 times higher than that of the westernmost part of the state,” the Rate Bureau stated in case materials filed with DOI.
That’s inflamed coastal officials who say damage can be just as intense west of I-95–even to the mountains–and that the Rate Bureau’s filings would show that if they accounted for historical data. They say the current system, which is based on risk models, is destroying the viability of coastal homeownership.
“The cost of homeowners insurance along the North Carolina coast has gotten out of hand as we continue to see increase after increase with no end in sight,” said a statement from the N.C. Business Alliance for a Sound Economy, based in Wilmington. “Now is not the time or the place to put unnecessary financial burdens on coastal residents or homeowners across the state.”
Related: Wilmington resolution opposes insurance rate increases
After the bureau’s latest filing surfaced, Sen. Thom Goolsby (R-New Hanover) suggested North Carolina needs a coast-based insurance commissioner to get this area’s case across.
“Because, I will assure you, people in Raleigh, in the Piedmont and mountains and all, they will screw us every chance they get, and they do,” he said during a discussion with legislators and beach town officials in January.
Changes to the system are the aim of a House bill that has been eligible for consideration in the current–though nearly concluded–legislative session. Co-sponsored by Reps. Susi Hamilton (D-New Hanover) and Frank Iler (R-Brunswick), the bill would require the Rate Bureau to include actual hurricane loss data for each year since 1987, and the state’s insurance commissioner would have the power to request a statistical analysis comparing the historical data with risk-model data for, ideally, a more reliable way to determine fair rates.
Related: Insurance-rate ‘fairness’ a goal of bills in legislature
N.C. Insurance Commissioner Wayne Goodwin slammed the Rate Bureau’s proposal when it emerged Jan. 3, noting it was just six months after the most recent set of increases.
He asked the bureau to withdraw it or expect a full hearing.
While open to the public, the Oct. 20 hearing will involve only the Rate Bureau, speaking on behalf of insurance companies in North Carolina, and staff from DOI, representing the public’s interests.
Goodwin will serve as the hearing officer and may determine “what, if any, rate adjustments are warranted,” explained a public notice.
It said the hearing’s delay would allow DOI’s staff more time to examine changes the Rate Bureau has made to the filing since it emerged.
Click here and enter serff tracking number NCRI-129361028 to view the filing.
DOI has already held a public comment period; it drew more than 10,000 written comments between Jan. 3-31 and another 25 roughly at a public hearing held in Raleigh on Jan. 24, the department said.
More reading:
Insurance industry files for more rate changes
Local legislators decry proposed insurance increase; state commissioner’s office responds
Ben Brown is a news reporter at Port City Daily. Reach him at [email protected] or (910) 772-6335. On Twitter:@benbrownmedia
