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Real Estate - Residential

Local Realtors Oppose Requested Homeowner Insurance Rate Hike

By Cece Nunn, posted Nov 22, 2017
Cape Fear Realtors, a Wilmington-based regional Realtors association, announced its opposition Wednesday to a proposed homeowner insurance rate hike.

North Carolina Insurance Commissioner Mike Causey on Monday announced that the N.C. Rate Bureau has filed notice with the state Department of Insurance asking for a statewide average increase in homeowners insurance rates of 18.7 percent for 2018, according to a DOI release.

The N.C. Rate Bureau represents the homeowners insurance companies in the state in asking for the increase, the release said.

“This is a similar request that was made three years ago, which was denied, in part, because the Rate Bureau is not using the right models and existing rates are already too high,” said Cape Fear Realtors CEO Taylor Oldroyd, in a CFR news release. "Currently, insurance companies use computer generated models to determine insurance rates throughout the state. They are not required to use historic costs associated with storm and hurricane damage." 

Oldroyd said that’s one of the issues the legislature has been working to address in recent years.

The rate filing announced Monday is the first homeowners insurance rate filing the Department of Insurance has received from the Rate Bureau asking for an increase in rates since 2014, the DOI release said. The 2014 filing resulted in the first homeowners insurance hearing in more than 20 years with the state insurance commissioner finally deciding not to change the rate on behalf of policyholders, according to the release.

The last time a homeowners insurance rate increase request from the Rate Bureau resulted in higher rates for homeowners was in 2012. The Rate Bureau asked for a 17.7 percent increase, then settled at an overall statewide average of 7 percent after negotiations, the DOI release said.

According to CFR officials, homeowner insurance legislation in the General Assembly in the past few sessions has been spearheaded by Sen. Michael Lee (R-New Hanover) and former Rep. Chris Millis.

“Senator Lee’s bill to address Consent-to-Rate letters that allow insurance companies to charge homeowners rates that exceed limits set by the Rate Bureau failed in House/Senate conference in May. This, along with a number of issues, needs to be addressed to improve the process of how homeowner insurance is both regulated and determined,” said Oldroyd. “Homeownership insurance rates are too high, and we plan to work against any increases proposed, which would result in creating a worse situation than already exists.”

According to the DOI news release, a public comment period is required by law to give the public time to address the Rate Bureau’s proposed rate increase. There are three ways to provide comment:

  • A public comment forum will be held 10 a.m. to 4:30 p.m. in the DOI's second floor hearing room in the Albemarle Building, 325 N. Salisbury St. in Raleigh, to listen to public input on the Rate Bureau’s rate increase request.
  • Emailed public comments should be sent by Dec. 29 to [email protected]gov
  • Written public comments should be mailed to Tricia Ford to be received by Dec. 29 and addressed to: 1201 Mail Service Center, Raleigh, NC 27699-1201

All public comments will also be shared with the N.C. Rate Bureau. If DOI officials do not agree with the requested rates, they will be negotiated with the N.C. Rate Bureau, the state release said. If a settlement cannot be reached within 50 days, a hearing will be called.

Settlements have been reached on rate filings in the past, but if the case goes to a hearing, the hearing officer will rule on rates and any appeal would go through the court system, according to the state release. The rates set in these cases represent the highest amount allowable for all companies to charge.

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