Mobile home insurance rates rising

Insurance for mobile homes will rise an average of 3.2 percent statewide, the first increase in 26 years.

The rate increase, which goes into effect Dec. 1, varies widely depending on where the mobile home is located. The new rates cover manufactured homes of all types.

Rates on mobile homes in the Triangle will either increase 2.9 percent or remain the same, depending on the type of mobile homeowners policy the owner has. But increases in 18 coastal counties will rise 24 percent or more.

On Friday, the state Department of Insurance announced a settlement with the N.C. Rate Bureau, which represents the state's property and casualty insurers. In May, the Rate Bureau requested rate increases that averaged 23.9 percent, the first time it sought a rate change in more than a quarter-century.

The settlement was negotiated by the Insurance Department and Rate Bureau and approved by Insurance Commissioner Jim Long.

"In the final analysis, we were happy to get a change," said Ray Evans, general manager of the Rate Bureau. "It is obviously not what we would have liked."

Brad Lovin, executive director of the N.C. Manufactured Housing Institute, said the timing of the increase is unfortunate, given that inflated gas and food prices already are hitting consumers hard. Still, he said, "I guess the bright side is the commissioner of insurance didn't grant the full request."

About 296,000 mobile homes across the state are covered by insurance policies, Evans said. Of those, about 22,500 are based in the 18 coastal counties where rates are going up the most.

North Carolina had a total of 577,323 manufactured homes in 2000, according to the latest data from the U.S. Census Bureau.

The Insurance Department estimates the settlement will save consumers $25 million a year in premiums, compared with the increase initially sought by the bureau.

"I hope consumers will understand that it was about time for us to raise rates enough to allow these companies to keep offering coverage for mobile homes -- but at the same time keeping rates affordable overall," Insurance Department spokeswoman Chrissy Pearson said.

Pearson said the significantly higher rates in coastal counties reflect the fact that insuring mobile homes is riskier in coastal areas because of their susceptibility to wind damage.

"We're convinced that we are going to see ... more hurricanes and hurricane-type activity along the coast," Evans said.