Insurers must have taken it literally when they attended their last industry convention and some inspirational speaker encouraged them to reach for the skies or aim high or dare to dream big. For those insurers are asking for another big rate increase in North Carolina for homeowners insurance rates, an average boost of 25 percent.
Now, this is the first volley in a game the industry plays periodically. First, it puts in for a huge rate hike, then Insurance Commissioner Wayne Goodwin expresses shock and chagrin and then he does a little rhetorical blast on the industry. In the end, the industry settles for a smaller hike rather than go to court to fight Goodwin.
But it must be said that 25 percent is a doozie of a request. Even Goodwin seemed genuinely shocked at that amount after an increase just last year, saying he was appalled and urging insurers to just withdraw the request. He said he wouldnt even think of a settlement conference that started at 25 percent.
Increases would vary depending where people lived. Some beach homeowners would pay 35 percent more under the industry request, but other homeowners might get a slight decrease.
The insurers, through the N.C. Rate Bureau, defend the rate hike requests as necessary when they face lots of claims. Some companies wont write insurance for homeowners unless those individuals also buy car insurance from them.
Goodwin, who has certainly been a consumer-friendly commissioner, is the one who stands between policy-holders and excessive rates, and this kind of request demonstrates why its important that the commissioner have the power he has. There have been flirtations with changing that on the part of some lawmakers in the General Assembly.
But it should not change. Now, let the dance begin.