A hearing got underway Monday to determine whether a requested average 42.2% rate increase in homeowners’ insurance rates by the North Carolina Rate Bureau (NCRB) will be granted later this year.
NCRB represents private insurance companies seeking the increase.
It comes at a time when many North Carolinians are feeling the pinch of rising costs, not only due to the rise in inflation the last few years, but especially for residents of the western part of the state who are trying to pick up the pieces of their lives after Hurricane Helene devastated and even decimated most of the area.
Attorneys and staff members of the NCRB and North Carolina Insurance Commissioner Mike Causey presented their arguments and evidence for and against the rate hike at the Department of Insurance’s office at 3200 Beechleaf Court in Raleigh.
The request was made in January, with the NCRB wanting the increase to take effect on Aug. 1.
A multitude of homeowners and others from across the state voiced their concerns at a public comment forum on Jan. 22 and by email and mail. That, along with a bipartisan group of North Carolina Congress members, led by Republican Congressman Greg Murphy, NC-03, calling on Causey to reject the NCRB’s request, led Causey to schedule the hearing.
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 context of the extreme flooding the area saw from Helene.
In February, Causey said he heard that insurance companies were also having a tough time, with some paying out more in claims than they are taking in.
“I heard from one Farm Bureau agency owner that said last year for every $100 they took in in premiums, they were paying out $112 in claims, so I know it’s tough in the homeowners’ market, so that’s not a sustainable path,” Causey said. “But when I hear from groups like AARP, they remind me that the increase in the cost-of-living adjustment from Social Security was only 3.2%, so that doesn’t jive with the average 42%.”
He added that he would like to see insurance companies do a better job of tightening their financial belts and holding down their expenses.
“The insurance companies have got to do a better job of rooting out fraud and reporting fraud,” Causey stated. “Our office is doing everything we can to go after insurance fraud that’s driving up our insurance cost. A lot of these roofing contractor scams, things like that, play into the mix.”
Amy Funderburk, general counsel at the Department of Insurance and the hearing officer, heard from Rate Bureau attorney Mickey Spivey, who said that homeowners’ insurance rates in North Carolina are “severely inadequate” due to inflation and the storms that have hit the state.
In November 2020, NCDOI received a request from NCRB for a 24.5% increase in homeowners’ insurance rates. The filing resulted in a settlement between Causey and NCRB for an overall average rate increase of 7.9%.
State Sen. Natasha Marcus, D-Mecklenburg, Causey’s challenger in next month’s General Election, held a news conference outside the insurance department headquarters yesterday.
She has been critical of Causey’s performance while in office, including the rate hikes that have been allowed over his tenure.
The hearing is expected to last several weeks. State law gives the insurance commissioner 45 days to issue an order once the hearing concludes.