Coastal residents protest insurance hike [The News & Observer (Raleigh, N.C.)]

Oct. 18--Local officials, real estate representatives and citizens railed against the possibility of a 30 percent jump in their homeowners insurance rates Wednesday.

They're mad as heck and they don't want to take it anymore.

A parade of people from North Carolina's coastal counties -- local officials, real estate representatives and Joe and Jane Citizen -- marched to the podium and railed against the possibility of a 30 percent jump in their homeowners insurance rates Wednesday.

They decried the rate hike sought by the insurance industry as excessive, unwarranted and unfair, given that the rates in 18 coastal counties would rise far more than in the rest of the state if the industry's request is approved. Moreover, the last time a rate hike was approved in North Carolina, in 2008, rates along the coast rose as much as 29.8 percent -- far above the statewide average of 4.05 percent.

"We don't understand why you keep doing this to us and we would like for it to stop," testified Emilie Swearingen, a member of the Kure Beach town council. "Stop this discrimination against the coastal communities."

Others raised the specter of elderly residents being forced to sell their homes, or being foreclosed upon, if the rate hike is approved.

Auditors at the state Department of Insurance, which hosted the public comment session at its downtown Raleigh offices, are studying the rate hike request filed earlier this month by the N.C. Rate Bureau, which represents insurers. If the department staff and the Rate Bureau fail to agree on an appropriate homeowners rate, Insurance Commissioner Wayne Goodwin would set a rate after conducting a hearing where the two parties would present evidence. That rate could be appealed to the courts.

Lucy Vance, a Brunswick County resident, said her annual homeowners insurance premiums -- plus wind and hail protection she purchases separately from the state-created N.C. Beach Plan -- have risen from $1,844 in 2004 to $3,597 this year.

"In those seven years, I have never lost one shingle," she said. "Please reject the rate. Please consider lowering it."

Many homeowners are hit with annual premium increases even in years when the state-approved rate hasn't changed because their insurers have reduced or eliminated discounts, or because they have "replacement cost" policies that permit increases to keep pace with construction costs. About 2 million residences are covered by homeowners policies in North Carolina.

The industry justifies its request for a rate hike by citing more claims, higher costs per claims, higher costs for the reinsurance they buy to insulate them from catastrophic losses and, along the coast, potential losses should a severe hurricane strike.

None of the more than 30 speakers at Wednesday's hearing -- none of whom spoke on the industry's behalf -- were buying those arguments.

"We haven't had a serious storm in Dare County in awhile," said Bobby Outten, the county manager. "We had Irene. Irene was a flood event, very little wind damage. Flood events aren't covered by this type of insurance. We can't understand what would justify a 30 percent rate increase."

Outten said the rate hike for the owner of an average Dare County home -- a structure valued at $160,000, not including the cost of the land -- would amount to $881 a year. That would raise the annual premium of "the average working class person" to a little over $3,800.

Several critics of the rate request blasted the computer models the industry uses to calculate future risks from hurricanes.