Insurance Commissioner Settles Homeowners' Insurance Rate Dispute

Insurance Commissioner Settles Homeowners' Insurance Rate Dispute

Insurance Commissioner Settles Homeowners' Insurance Rate Dispute

By / State News / الثلاثاء, 24 نيسان/أبريل 2018 01:33

By WILLARD KILLOUGH III
Managing Editor

RALEIGH, N.C. : North Carolina Insurance Commissioner Mike Causey announced a settlement with the NC Rate Bureau (NCRB) regarding their proposal to increase homeowners' insurance rates by an average of 18.7%. The settlement lowers that requested increase to 4.8% on average statewide.
Commissioner Causey explained last week, "I have negotiated a rate that will have minimal impact on the coast yet keep the state's insurance companies financially sound,” and, "On the Outer Banks, residents with a $200,000 home will see an average rate that is more than $400 less per year than what the NCRB originally proposed."
According to the NC Department of Insurance (NCDOI), the 4.8 percent increase will vary according to territory with a cap of 5.5 percent statewide instead of the 25 percent bump on the coast initially proposed by the NCRB.
According to a release issued by the NCDOI, "For instance, in Currituck County on the Outer Banks, residents who insure a $200,000 frame home will see an average $120 difference in their annual premium or $10 per month."
The North Carolina Department of Insurance received a Dwelling insurance rate filing from the N.C. Rate Bureau on Wednesday, February 7th. The N.C. Rate Bureau, which is not part of the Department of Insurance, represents all companies writing property insurance in the state. The Rate Bureau requested a statewide average rate increase of 18.9 percent, varying by territory, with a requested effective date of Oct. 1, 2018. That filing included a requested increase of 40.5 percent for extended coverage (wind) policies, but a decrease of 20.8 percent for fire polices, making the statewide average request an increase of 18.9 percent.
Dwelling insurance policies are not homeowners insurance policies. Dwelling policies are offered to non-owner-occupied residences of no more than four units, including rental properties, investment properties and other properties that are not occupied full-time by the property owner. The Rate Bureau also requested revisions to the current geographic rating territories. The proposed territory revisions are the same territory definitions applicable to homeowners’ policies.
The filing was reviewed by Department of Insurance experts to determine what, if any, rate adjustments are warranted.
The agreement announced on April 18th, also covers insurance for tenants and condominiums, which is capped at 12 percent.
According to NCDOI, the rate settlement will save consumers approximately $293 million in the first year alone, compared to the NCRB's proposed increase.
The Rate Bureau filed for the proposed rate increase claiming the increase was necessary because of the increased costs stemming from tornado, severe thunderstorm, and windstorm/hail damage.
According to NCDOI, Commissioner Causey had concerns over the initial filing and set a July 23, 2018, hearing date for the case to be decided if an agreement couldn't be reached. Over the last several months, the Department and the NCRB have been in litigation while trying to settle the case without the necessity of a long, expensive hearing. The last time homeowners saw an insurance rate increase was in 2012. At that time, the NCRB case was settled for an average statewide increase of 7 percent.
The increase will take effect October 1, 2018.

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