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Back You are here: Home News Local and State News Local Hearing Set For Homeowners Insurance Rate Request

Hearing Set For Homeowners Insurance Rate Request

Initial review raises concerns that the rate increases requested by the insurance companies may be excessive and unfairly discriminatory.

RALEIGH, N.C. : February 19, 2014 - Insurance Commissioner Wayne Goodwin has ordered that a hearing be held in the matter of the insurance companies' request to raise homeowners insurance rates, stating that the proposed rates appear to the Department of Insurance to be excessive and unfairly discriminatory. The insurance companies, represented by the North Carolina Rate Bureau, requested an overall statewide average increase of 25.3 percent for homeowners insurance rates, varying by geographic territory, on Jan. 3, 2014.
The hearing is scheduled to begin on Aug. 6, 2014, at 10 a.m. at 430 N. Salisbury St. in Raleigh. The hearing is open to the public; however, there will be no opportunity for members of the public to speak at the hearing.* Experts from the N.C. Rate Bureau, on behalf of the insurance companies, and experts from NCDOI, representing the interests of the public, will present their cases for or against rate changes. Goodwin is to serve as the hearing officer and determine what, if any, rate adjustments are warranted.
After an initial review of the filing and more than 10,000 comments submitted by the public, NCDOI experts believe the requested rate increases are not justified. Among NCDOI's concerns are:
• The filing uses hypothetical data, rather than actual data, when calculating costs including those for the net costs of reinsurance and trended modeled hurricane loss costs.
• The filing lacks necessary data, documentation and explanations to meet statutory burden of proof for rate increases.
• Old data is used in the filing when more when more recent data should be available and included in the analysis.
The filing is available for public review on the Department's website. To view the entire filing, go to http://pserff.ncdoi.net/pc.html and enter the Serff Tracking Number NCRI-129361028.
• A public comment period on the rate filing was held from Jan.3 through Jan. 31 to engage the public in the ratemaking process. During that period, the Department of Insurance received more than 10,000 emailed or mailed comments, and approximately 25 people made comments in-person during a public comment session held on Jan. 24.
The North Carolina Department of Insurance received a homeowners insurance rate filing from the N.C. Rate Bureau in the late afternoon of Friday, Jan. 3.
The N.C. Rate Bureau, which is not part of the Department of Insurance and represents all companies writing homeowners insurance in the state, has requested a statewide average rate increase of 25.3 percent, varying by territory, with a requested effective date of August 1, 2014.
The requested rate changes range from -2.7 percent to +35 percent. The insurance companies have also requested revisions to the current geographic rating territories.
The filing is available for public review on the Department of Insurance website. To view the entire filing, go to http://pserff.ncdoi.net/pc.html and enter the Serff Tracking Number NCRI-129361028.
Insurance Commissioner Wayne Goodwin issued the following statement in January:
"New homeowners insurance rates went into effect in July 2013. I am appalled that the insurance companies would request another increase just six months later. I believe the insurance companies should withdraw this rate filing immediately. If they do not, the insurance companies should expect a full hearing on this matter; I will not entertain any settlement negotiations. I urge North Carolina homeowners to take advantage of the public comment period and let their insurance companies know what they
think about the notion of another homeowners insurance rate increase. Also, I take offense at the insurance companies' concerted efforts to file this request late on a Friday afternoon, when they think the public won't be paying attention."
In early 2013, Goodwin reached a settlement agreement with the NC Rate Bureau on the Homeowners Insurance Rate Filing that was submitted in October 2012. A public comment period was held on the filing shortly thereafter and over 9,000 comments were submitted. The NC Department of Insurance, upon reviewing of the filing and consideration of the comments, issued a Notice of Hearing on the filing to begin June 3, 2013.
The Hearing would have been the first on a Homeowners Insurance Rate Filing since 1993 and would have given NCDOI the opportunity to further scrutinize the filing through testimony and evidence submitted by the NC Rate Bureau. Ultimately the June hearing was never held and instead Commissioner Goodwin approved an agreement.
The NC Rate Bureau's filing represented a 30% rate increase for eighteen NC coastal counties. Based on filing data however, indicated rates - those the Rate Bureau concluded were the actuarial sound rates needed - were as high as 119% more than current rates. The NC Rate Bureau capped the increase request at 30%. That settlement agreement represented an overall statewide increase of 7% with the largest increases impacting coastal counties. The beach areas of the coast experienced  increases as of July 1, 2013 as high as 20%; inland coastal areas recieved much lower increases. While the
overall statewide average increase was 7 percent, it was much higher for coastal counties with the highest increase of 19.8% in New Hanover, Brunswick, Carteret, Onslow and Pender counties in areas nearest to the ocean. Areas within those counties farther inland got an increase up to 8.6%.
The following is a break down of the requested rate adjustments. Each line lists the territory number followed by the areas included in those territories and the increase or decrease in rate.
• 7 - Beach areas in Currituck, Dare and Hyde Counties : Filed % 35.0
• 8 - Beach areas in Brunswick, Carteret, New Hanover, Onslow and Pender Counties : Filed % 35.0
• 48 - Coastal areas in Currituck, Dare and Hyde Counties : Filed % 9.8
• 49 - Coastal areas in Beaufort, Camden, Chowan, Craven, Jones, Pasquotank, Perquimans, Tyrell and Washington Counties : Filed % 7.8
• 52 A - Eastern Coastal areas of Brunswick, Carteret, New Hanover, Onslow and Pender Counties Zip codes: 28403, 28404, 28405, 28406, 28407, 28408, 28409, 28410, 28411, 28412, 28422, 28428, 28443, 28445, 28459, 28460, 28461, 28462, 28467, 28468, 28469, 28470, 28480, 28511, 28516, 28520, 28524, 28528, 28531, 28532, 28533, 28539, 28553, 28557, 28570, 28577, 28579, 28581, 28584, 28589 : Filed % 35.0
• 52 B - Western Coastal areas of Brunswick, Carteret, New Hanover, Onslow and Pender Counties Zip codes: 28401, 28402, 28420, 28421, 28425, 28429, 28435, 28436, 28447, 28448, 28451, 28452, 28454, 28456, 28457, 28466, 28478, 28479, 28518, 28521, 28540, 28541, 28542, 28543, 28544, 28545, 28546, 28547, 28555, 28574, 28582 : Filed % -2.7
• 101 - Cities of Greensboro and Winston-Salem : Filed % 18.2
• 101 - City of Charlotte : Filed % 16.9
• 101 - Mecklenburg County : Filed % 23.2
• 101 - Caswell County : Filed % 9.5
• 101 - Forsyth County : Filed % 13.8
• 101 - Alexander, Davie, Iredell, Rockingham, Stanly, Stokes, Surry and Wilkes Counties : Filed % 29.8
• 102 - Alleghany, Ashe, Buncombe, Burke, Caldwell, Catawba, Henderson, McDowell, Polk, Watauga and Yancey Counties : Filed % 21.1
• 103 - Anson and Montgomery Counties : Filed % -0.8
• 103 - Davidson and Randolph Counties : Filed % 24.5
• 103 - Cabarrus and Rowan Counties : Filed % 35.0
• 104 - Avery and Mitchell Counties : Filed % 33.3
• 105 - Bertie County : Filed % 16.8
• 106 Bladen and Robeson Counties : Filed % 18.3
• 106 - Scotland County : Filed % 35.0
• 107 Chatham and Orange Counties : Filed % 18.2
• 108 - Cherokee, Clay, Jackson and Macon Counties : Filed % 25.9
• 109 - Gaston County : Filed % 26.6
• 109 - Cleveland, Lincoln and Rutherford Counties : Filed % 33.3
• 110 - Columbus County : Filed % 35.0
• 111 - Cumberland County : Filed % 30.4
• 111 - Richmond County : Filed % 35.0
• 111 - Sampson County : Filed % 31.3
• 111 - Harnett and Hoke Counties : Filed % 35.0
• 112 - Duplin, Greene and Lenoir Counties : Filed % 35.0
• 113 Cities of Durham and Raleigh : Filed % 24.4
• 113 - Granville and Person Counties : Filed % 35.0
• 113 - Durham and Wake Counties : Filed % 32.1
• 114 - Martin and Pitt Counties : Filed % 22.0
• 114 - Edgecombe, Halifax and Wilson Counties : Filed % 35.0
• 115 - Vance County : Filed % 35.0
• 115 - Franklin, Johnston and Nash Counties : Filed % 33.5
• 116 - Gates and Hertford Counties : Filed % 16.5
• 117 - Haywood, Madison, Swain and Transylvania Counties : Filed % 28.3
• 118 - Lee and Moore Counties : Filed % 26.5
• 119 - Warren County : Filed % 35.0
• 119 - Northampton County : Filed % 18.7
• 120 -Yadkin County : Filed % 2.9