Public input sought for proposed home insurance rate hike in North Carolina
The North Carolina Rate Bureau, a nonprofit organization created by state law, uses data from insurance companies in formulating the rate recommendations.
The proposed insurance rate increases in Catawba, Caldwell and Burke counties are as much as 20.5%. Alexander County's proposed increase would be 41.3% — the same as Mecklenburg County.
The average recommended insurance rate increase across the state is 42.2%. The highest of these rates would be on the coast, where some counties would see potential increases almost double the current rates.
Negotiations between the Rate Bureau and the N.C. Department of Insurance led to a lower rate than the one originally sought. In 2020, an average increase of 7.9% was implemented after an initial request of 24.5%, according to the department.
As part of the process, residents throughout the state will have a chance to give feedback on the rates.
These include an in-person hearing in Raleigh at 325 N. Salisbury St. from 10 a.m. to 4:30 p.m. on Monday.
Those unable to attend in person can join virtually via a video conferencing link provided by the department. The link can be found by visiting ncdoi.gov and clicking the link included in the blue banner at the top of the page.
The public may also submit emailed or written comments through Feb. 2. All email comments should be addressed to [email protected] while written comments should be addressed to 1201 Mail Service Center, Raleigh, N.C., 27699-1201.
Jarred Chappell, the chief operating officer for the Rate Bureau, said the organization reviews data from insurance companies to determine recommended rates.
He said some of the factors leading to the higher insurance rate request include higher material costs, the increased cost of labor in the construction and the higher cost of reinsurance for insurance companies brought on by the increased likelihood of catastrophic events, particularly at the coast.
Chappell said he did not know specifically why Alexander County's rate would be higher than others in the region but that rate requests for specific counties are made based on the nature of their insurance claims.
"For whatever reason, that county was grouped in with a couple of others that have a higher, I guess, frequency and severity of claims historically," Chappell said. "I'm sure there could be many, many different causes for that."
He also said there would still be individual variations in homeowner insurance costs regardless of the final permitted rate changes.
"You know, we file the base rate and insurance companies deviate off of that rate to price each individual risk adequately," Chappell said. "So in a lot of cases those properties are already priced adequately. Even if the commissioner accepted the full rate change, some people likely wouldn't see any change at all in their actual premiums going forward."
Our insurance rate system: It’s different, but it works for NC
Take steps to protect your home from winter damage
Advisor News
Annuity News
Health/Employee Benefits News
Life Insurance News