Mobile home insurance rates may soon skyrocket

By Beth Lawrence

If the N.C. Department of Insurance approves a request from the state's insurance rating agency, owners of mobile homes could face steep cost increases for insurance coverage.

The N.C. Rate Bureau has requested a nearly 100 percent increase for certain policies.

"The NCRB, which represents insurance companies and is not a part of the N.C. Department of Insurance, has requested an overall statewide average of 87.5 percent increase for MH-F – fire policies and an overall statewide average increase of 53.4 percent for MH-C – casualty policies," NCDOI said in a press release.

NCRB is asking that the increases be applied in two stages. The first phase would increase fire policies by 23.2 percent on July 1, 2023 and casualty policies by 31.5 percent. The following year policies would increase by 24.5 percent for fire and 33 percent for casualty.

Two representatives of the NCRB blamed the increase on rising costs and frequent claims by some homeowners.

"We try and do a review every one to two years," said Joanna Biliouris NCRB general manager. "And what we have seen is that claims cost and claims frequency, the number of claims that have been filed and the cost to actually resolve those claims, have both gone up pretty significantly in the past few years. That's what's kind of the basis of the rate increases we requested from the department of insurance."

Since the Rate Bureau represents all state insurance companies, they take claims data from all agencies to determine what recommended increases should be.

Biliouris argued it would be impossible to offset costs by simply raising insurance rates on individuals who file frequently rather than passing on the burden to all policyholders.

"There's a lot of factors that go into determining what your premium is going to be," she said. "Some of that is your claim history. If you've filed a lot of claims there is a factor that will get added to your premium, but there's what's called the base rate meaning you start at a certain number then you add in and subtract things. It's kind of a pool where the industry will look at all of what they call exposures like how much risk exposure (is) in there and how do I spread that risk.

"I had a water leak in my house that my insurance did cover. It turned out to be $25,000 to fix it. I don't know how the insurance company could turn around and charge me $25,000 in premiums for that one claim. The claims are larger than what the premiums are for any given property."

Policies are based on the cost to repair or replace at the time of the loss, so rising consumer prices in recent years figured into the NCRB's numbers, said Jarred Chappell, chief operating officer.

"When you see that number that we put out there, we're strictly reporting what the data tells us," Chappell said. "This is what is needed to cover the cost of these claims. We can't factor in what is affordable or not. That's why we did the two-phase implementation on this filing to limit the impact on the consumer."

Chappell said that if costs come down by the next review, the rate requested would reflect that.

There may be some good news in the numbers.

The state is divided into territories, and rates for policies differ from region to region, Biliouris said.

So, mobile home owners in Western North Carolina may not see the same ratings as a resident of the coast at risk of hurricane damage.

Historically, the DOI has not always given the Rate Bureau everything it asks for. There are often negotiations until both sides settle on a number.

Biliouris said the 87.5 percent average is not a case of haggling and setting a higher number expecting the DOI to bargain until they reach a number the NCRB actually wanted.

"This filing is over 2,000 pages of data and justification for those rates," she said.

In 2020 the NCRB requested a statewide average increase of 24.5 percent and settled on 7.9 percent. In 2018 the request was for 17.4 percent and an agreement was reached for 4 percent.

If the requested rate passes, that does not mean all policy rates will go up; individual companies can opt for different rates.

Mobile home owners have the opportunity to voice their concerns to the DOI before a decision is made. Comments are due by Nov. 18 and can be emailed to [email protected]. Written statements can be sent to Mary Faulkner, 1201 Mail Service Center, Raleigh, NC 27699-1201. Written comments should be mailed in time to reach the DOI by Nov. 18.