I said ‘No’ to insurance companies’ proposed rate hike

You’ve probably heard by now that I said “No!” to the average 42.2% homeowners’ insurance rate increase proposed by the insurance companies.

Homeowners were shocked with the high amount requested by the insurance companies. So was I.

I haven’t seen the evidence to justify such a drastic rate increase on North Carolina consumers. This extreme request sparked action from homeowners across North Carolina. The Department of Insurance received more than 24,000 emailed comments on the proposal. Hundreds more policyholders sent in written comments by mail. Others spoke out against the request during our public comment forum.

North Carolina consumers deserve a more thorough review of this proposal. I intend to make sure they get that review.

The 42.2% increase is the average for the state. The proposed rates put forth by the insurance companies ranged from 4.3% in some mountain counties to 99.4% in some beach areas.

The proposal was filed by the North Carolina Rate Bureau. The Rate Bureau, which represents companies that write common types of consumer insurance policies in the state, is not a part of the Department of Insurance.

The Rate Bureau was created by the General Assembly in 1977. Insurance companies writing homeowners’ insurance or personal automobile insurance policies in North Carolina must be a member of the Rate Bureau.

I have challenged the proposed increases as excessive and unfairly discriminatory. That’s why I rejected the proposal and set a hearing date on the matter for Oct. 7.

This is the fourth time since I took office as your Insurance Commissioner that the insurance companies have proposed a homeowners’ rate increase. And this is the fourth time that I’ve said “No!”

Here’s what happened the previous three times the insurance companies asked for an increase:

n In 2017, the insurance companies requested an average statewide 18.7% increase. I, along with my staff, which includes attorneys, actuaries and property and casualty insurance experts, reached a settlement with the insurance companies for a 4.8% rate increase, only a fraction of what was originally requested.

n In 2018, the insurance companies requested an average statewide 17.4% increase. We reached a settlement for 4.0%

n In 2020, the insurance companies requested an average statewide 24.5% increase. We reached a settlement for 7.9%. In addition, I got the insurance companies to agree to not request another increase for two years.

As your Insurance Commissioner, I have a balancing act to perform when it comes to insurance premiums:

n I have to make sure that North Carolinians are paying a fair premium on their insurance policies. I intend to make sure they continue to do so.

n I have to make sure that we have a robust insurance market so North Carolinians can have choices in their insurance policies. Without this competition, consumers will suffer. Along the same lines, I need to make sure insurance companies are solvent so that they have enough money on hand to pay your claims.