Insurers asking more NC homeowners for permission to raise their rates [The News & Observer (Raleigh, N.C.)]
|By David Ranii, The News & Observer (Raleigh, N.C.)|
|McClatchy-Tribune Information Services|
"That's not a rate increase," Smith said of
That's a matter of opinion, but it's beyond dispute that
"Since the premiums we are offering are higher than the (state-approved) rates,"
Once a rarity, in recent years the volume of
The data show that about 22 percent of policyholders outside the state's beach and coastal areas agreed to consent-to-rate requests in 2010, rising to about 26 percent in 2011. In coastal counties, the number was about 30 percent in 2010 and 25 percent in 2011; in beach areas, it was 40 percent both years. (The data do not include homeowners policies in beach and coastal areas that are provided by the state-created Beach Plan.)
Some companies go the consent-to-rate route "with more regularity than others," said
Function of 'inflexibility'
Industry insiders attribute the spread of such requests to the industry's inability to win approval for the rate increases they feel are necessary to make a profit.
"It's a function of the inflexibility of our pricing system in
"We believe ... that the rate we have been able to agree with the (
The last increase in homeowners insurance rates in
In October, the
Companies pull back
But a parade of residents from the state's coastal counties decried the proposed increase as excessive and unfair at a public comment session held in
That led to Insurance Commissioner
The lid on homeowners rates has prompted some insurers to pull back from the homeowners' insurance market. Some companies, including
Oyango Snell, regional government relations counsel for the
According to the association,
When the state-approved rate "does not adequately reflect a specific risk,
Wake Clinard, president of
The net effect can be even higher, because many homeowners receive discounts that enable them to pay less than the state-approved rates. For example, Smith, the
Consent-to-rate requests can be much smaller, however. Mack, the regulator, said he recently received a consent-to-rate request on his homeowners policy that sought about 10 percent above the maximum.
Smith said she can't figure out why she was singled out for a consent-to-rate request, especially because she's had her homeowners policy with
Although insurers aren't required to tell policyholders why they are being asked to sign a consent-to-rate form, that's a deficiency that the
"We'd like to see it more transparent," Mack said.
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