Insurance commissioner calls rate hikes excessive

Insurance Commissioner Mike Causey rejected a request by the N.C. Rate Bureau to jack up homeowner insurance rates by a statewide average of 42.2%.

On Feb. 6, Causey announced his decision to reject the homeowners' insurance rate increase proposal during a meeting of the Council of State, composed of 10 statewide elected executive branch positions, according to the Associated Press.

"I just want to announce today that I said no," Causey said.

Causey visited Goldsboro and New Bern on Jan. 31 to address his concerns about the proposed rate increases.

The N.C. Rate Bureau, which represents insurance companies that write policies across the state, is asking for homeowner insurance rate hikes ranging from 99.4% in coastal counties to the lowest rate increase proposal of 4.3% for Haywood, Madison, Swain and Transylvania counties, according to the proposal filed with the N.C. Department of Insurance.

The N.C. Rate Bureau has asked for a 57.8% increase in homeowner insurance rates in Wayne County.

Area county increase requests are 71.3% for Lenoir and Duplin counties, 40.8% in Johnston County, 45.5% in Sampson County, 57.8% in Wilson County, and 57.8% in Greene County.

Causey said he opposes the rate hikes, and described the proposed increase as "excessive and unfairly discriminatory."

Causey said he doesn't see evidence to justify the increase, adding that the N.C Department of Insurance has received more than 24,000 emails and hundreds more by mail about how shocked they were about the request.

"I haven't seen the evidence to justify such a drastic rate increase on North Carolina consumers," Causey said. "Homeowners were shocked with the high amount requested by the insurance companies, and so was I."

Nine members of Congress signed a Jan. 26 letter sent to Causey to express their concerns and opposition to the homeowners' insurance rate increase proposal.

"Thousands of our constituents are still struggling with increased inflation, interest rates and housing prices," according to the letter. "An increase of this amount will only exacerbate this cost-of-living crisis and make homeownership more difficult to achieve.

"While we understand it is natural for insurance companies to raise their rates, a rate increase of such a large amount would be devastating for our constituents."

The members of Congress, who serve North Carolina residents across the state, asked Causey to deny the rate increases.

"We appreciate your office's past engagement on this issue and are hopeful you will reject this request from the North Carolina Rate Bureau," according to the letter.

Causey said North Carolina consumers deserve a more thorough review of the proposal by the N.C. Rate Bureau, and he intends to make sure they get it.

Any insurance companies writing homeowners' insurance or personal automobile insurance policies in North Carolina must be a member of the Rate Bureau.

The request follows the homeowners' insurance rate filing that the Department of Insurance received from the N.C. Rate Bureau in November 2020. The request was to boost homeowner insurance rates by a statewide average of 24.5%, Causey said.

The filing resulted in Causey reaching a settlement with the N.C. Rate Bureau for an overall average rate increase of 7.9%, he said.

Causey said the N.C. Rate Bureau couldn't propose another rate increase in two years once the settlement was put into effect in 2022.

Causey sets October hearing

Causey set a hearing on Oct. 7 at 10 a.m. to evaluate the request and determine what is reasonable, according to the Associated Press.

According to state law, Causey is given 45 days to issue an order once the hearing concludes.

Causey said the hearing date is a part of the process the Department of Insurance must follow by state law, and the insurance companies represented by the N.C. Rate Bureau need time to "digest" his rejection of their homeowners' insurance rate increase proposal.

He said reaching a settlement, like he did in 2020, is a possibility but the October hearing is likely where they are heading.

"I'm sure the insurance companies and the N.C. Rate Bureau need time to digest this," Causey said. "If we can reach a settlement in a month of two, it may negate the need for a court hearing.

"But as of right now, it looks like we are heading to that hearing in October."

Causey said he appreciates the feedback he received from the public about his rejection of the proposal.

"We've gotten a number of emails from the public thanking us for standing up for them," he said. "I appreciate the people who took the time to talk with us."

Causey said he is representing the consumers, and not only wants to do what is good for the people, but find the best way to compromise and come to a settlement with the N.C. Rate Bureau like before.

"It's not an easy matter," Causey said. "It's complicated and complex. I represent the consumers."

Causey said he is willing to listen if the N.C. Rate Bureau comes back with numbers that are more reasonable, because the majority of people he has talked with can't stand the proposal.

"I hear both sides," Causey said. "I want to make sure the people's voices are heard. There is a possibility a settlement can be reached."