NC commissioner faces attack from opponent as increase in home insurance costs looms

State Sen. Natasha Marcus has launched an attack website to spotlight her opponent’s record on rising homeowners’ insurance rates.

And it comes with a special feature: it’s searchable.

On RateHikeMike.com, the site paid for by Marcus’ campaign, users can see how much rates have increased by county under Insurance Commissioner Mike Causey since 2017. It also shows how much they could rise under a proposed rate increase; the percentage of homeowners subject to “consent-to-rate” notices; and how much Causey’s campaign has received in donations from insurance industry sources.

Two-term Republican commissioner Causey is up for reelection. His challenger, Marcus, a Democrat, is a three-term state senator from Mecklenburg County.

“We wanted to provide voters with the information they deserve, and why their insurance bills have jumped so much, ” Marcus told The News & Observer in a phone conversation.

For his part, Causey hasn’t viewed the website and doesn’t plan to, he told The N&O in a phone call on Monday. Under his watch, he also maintains that he’s worked to ensure that any proposed increases are “reasonable and actuarially sound.”

“Ideally, you’d like to keep [increases] as close to zero as possible, but you have to look at the reality,” he said. “The insurance commissioner doesn’t set insurance rates.”

The site’s launch comes less than a month from a scheduled Oct. 7 hearing on a new proposed rate increase and less than 49 days until the Nov. 5 election — a signal the campaign has entered a more aggressive phase.

After a filings moratorium lifted on homeowners’ insurance in January, the N.C. Rate Bureau, which represents companies that write insurance policies, asked for a 42.2% average increase across the state. It’s called for even steeper increases for storm-prone areas along the coast.

It’s been three years since the last rate increase — in November 2020, when the Rate Bureau asked for an overall rise of 24.5% and ultimately received 7.9%.

On Feb. 6, Causey rejected the latest request, calling it “excessive and discriminatory.” He closed public comments and promised a “thorough review.” Since then, the department’s actuaries, attorneys and consultants have been working to negotiate a new rate.

On May 15, The N&O filed a public records request seeking more information. The request is still undergoing “legal review,” said Barry Smith, a spokesman for the state’s Department of Insurance.

Seven months on, however, it appears talks have hit an impasse. Last week, Causey said his team met with the Rate Bureau, and they couldn’t agree on a new rate.

“We’re so far apart,” he said. “We asked that they come back with another proposal. The door is still open, but so far that hasn’t happened.” At this point, he called an Oct. 7 hearing the “best solution.” “That’s where we’re headed,” he said.

State law gives the insurance commissioner 45 days to issue an order once the hearing concludes.

The Rate Bureau declined to comment. North Carolina is one of the few states — if not the only one — where a Rate Bureau still exists. In almost every other state, each carrier files its own homeowners’ rates independently. But here, the Rate Bureau, created in 1977 by the General Assembly, has the responsibility to file and negotiate rates on behalf of the entire industry.

Even as the clock ticks down, Marcus casts doubt over the hearing. She also questions Causey’s transparency.

“It’s completely opaque the way he runs his office,” said Marcus, adding: “He’s never required [insurers] to show up in a public setting and be subject to cross examination.”

Based on that record, she predicted he won’t allow a hearing this time, either. She added: “It’s unacceptable. He’s allowing consumers to get taken advantage of, and insurance companies are making record profits to make up for losses in other states.”

Ongoing debate as insurers tighten guidelines

As climate-driven losses mount and prices have climbed — up 21.2% since February 2020, according to Bankrate — the insurance industry is teetering.

In 2023, insurers saw their net losses jump to $101.29 billion, up 21.3% year-over-year, a May report from S&P Global found, “the worst underwriting results in over a decade.”

The slump has led to skyrocketing premiums for homeowners in North Carolina. In Wake County alone, roughly 46% of policies were subject to consent-to-rate notices in 2023, according to the Marcus campaign website. (The state’s current threshold, written into law, allows insurance companies to charge rates higher — up to 250% more — than the state-approved rate.)

It’s also led to a surge in denied claims and nonrenewals. In October 2023, Ohio-based Nationwide decided not to renew 10,525 homeowners’ insurance policies in Eastern North Carolina.

The fallout appears contained for now; and by all accounts, North Carolina is faring better than most.

The average cost of homeowners’ insurance in North Carolina is $1,975 per year, or about $165 per month, according to a NerdWallet analysis. That’s close to the national average of $1,915 per year, even with the state’s consent-to-rate threshold.

Like disputed filings before, negotiations are typically “tense,” said Joe Stewart, vice president for government affairs of the Independent Insurance Agents of North Carolina. “It’s a delicate balancing act.”

Though not privy to ongoing negotiations, he predicts a single-digit increase “no greater than 9.9%” this year. However, it’s speculative, he added.

Other analysts are hedging their bets.

“I have no idea what Causey is going to do,” said Don Hornstein, the Thomas F. Taft Distinguished Professor at the University of North Carolina School of Law. “There’s going to be some increase, whether it’s through a hearing or litigation. The losses are increasing. There’s no silver bullet.”

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