North Carolina homeowners will know the results of a request made by the North Carolina Rate Bureau (NCRB) to raise homeowners’ insurance rates an average of 42.2% in the next week or so according to North Carolina Insurance Commissioner Mike Causey.

The NCRB represents private insurance companies seeking the increase.

The hearing, which got underway on Oct. 7, recently wrapped up. State law gives the insurance commissioner 45 days to issue an order once the hearing concludes.

“We’ve been in court since October 7, and it’s been a grueling process,” he told CJ in a phone interview earlier this week. “It’s a hardship not only on our staff, but I heard a lot of complaints from the Rate Bureau and the insurance industry about the cost. That’s something back during the campaign, my opponent (former Democrat state Sen. Natasha Marcus) was attacking me all the time with “Rate Hike Mike” comments and saying that I’m not transparent. Well, that’s the furthest thing from the truth because there’s a process that has to be followed no matter who the commissioner is, and the public comment period is something we always have.”

Causey said once they find out about a proposed rate hike, they notify the press and ask for public comment. Most, if not all, say they don’t want their rates raised. When that occurs, by state law, the insurance commissioner sets up a court hearing date about ten months out. In the meantime, as granted by state law, the insurance commissioner can negotiate settlements if the insurance industry is willing to enter into those negotiations. When settlements were negotiated, he said they have been very favorable to consumers. That means a win for consumers and the state, which can save on court costs of a lengthy hearing.

This time, however, both sides were so far apart, he told CJ, they couldn’t make any progress in negotiations.

“They (NCRB) come back telling me it’s costing them $5000 an hour,” Causey said. “You could spend $1 to $2 million in a court case and come out far worse than you do if you can reach some sort of settlement. I hope that we’ll have a public announcement here in the next week or two on where we are.”

The request was made in January 2024. A multitude of homeowners and others from across the state voiced their concerns at a public comment forum on Jan. 22, 2024, and by email and mail. 

As expected, no one was in favor of the increase, which could see rates in coastal areas, like Swansboro, Onslow County, go as high as 71.4% and 99% in places like Emerald Isle. 

Those in the mountains would see the lowest increase between 4%-20%, although that number may change within the context of the extreme flooding the area saw from Helene.

Causey said he has heard from legislators and some members of the public that homeowners’ insurance rates have already gone up despite an announcement not being made about the final decision from the hearing. He said that the state legislature passed a law years ago called Consent to Rate, which is an agreement between the insurer and policyholder where the policyholder agrees to pay a premium greater than the established insurance premiums set by the NCRB.

“Upon notification of the policyholder, and a lot of times when you buy the policy. they’ll say this is a Consent to Rate policy,” he said. “So, if that insurance company sees the need to raise your homeowners’ rate in order to keep you as a policyholder, they will send you a notice ahead of your renewal date, and you say that’s higher than the state law allows. Well, Consent to Rate allows the company to go 2.5 times whatever the cap is at the state level, and the policyholder has a choice; they can take it or not take it, but if you don’t take it, the company’s not going to continue your policy.”

Causey said the legislature passed the law to prevent companies from leaving North Carolina or stating they would not write homeowners’ policies.

“So, it is a tool that’s very helpful to the industry, and we monitor it very closely, and I think 40-50% of companies use Consent to Rate,” he told CJ. “That’s just something that’s not very well understood by the general public.”