State Insurance Commissioner Wayne Goodwin has ordered that a public hearing be held to discuss the recent rate increases sought for homeowner’s insurance in North Carolina.
The hearing, which will be open to the public, is scheduled for June 3 in Raleigh. Goodwin will listen to experts from both the Department of Insurance and the N.C. Rate Bureau, which represents insurance companies that write policies across the state.
Goodwin will then issue a ruling, which can be appealed to the courts.
The department’s experts believe the increases the industry wants are not justified based on a review of the 1,200 pages of analysis and testimony submitted. The department listed a number of concerns it may raise at the hearing, including the methodology the Rate Bureau used to calculate profits, and the risk factors used to calculate rate changes.
Ray Evans, director of the Rate Bureau, said the industry expected that a hearing would be held. As for the concerns raised by the department, Evans noted that it’s typical for the department to raise a large number of issues when ordering a public hearing. Under state law, the department can raise at a public hearing only the issues outlined in the notice announcing the hearing.
“We disagree for the most part with their findings,” Evans said. “But that hearing is a place to try to iron out the differences.”
Insurers seek rate increases for homeowner’s insurance that range from a high of 30 percent in coastal counties to a low of 1.2 percent. Rates are set by region, based on the number and type of claims and repair costs in the area.
Rate increases sought include 11.8 percent in Raleigh and Durham, and 11.1 percent in the rest of Wake and Durham counties, plus Orange and Chatham counties. The average increase requested is 17.7 percent.
The hefty increase being sought along the coast fits a long-term pattern that has frustrated and outraged coastal communities that contend the rates homeowners pay are already unjustifiably high.
More than 1,500 homeowners wrote to the Insurance Department, mostly via email, to complain about the rate increase request unveiled Oct. 3. Last week, more than 30 people – nearly all of them from North Carolina’s coastal counties – spoke against the request at a public hearing in Raleigh.
The last time the Rate Bureau requested a rate increase for homeowner’s insurance, in 2008, it sought an average increase of 19.5 percent but agreed to accept a 4.05 percent increase after negotiating with regulators. That rate increase went into effect in May 2009.