Insurers want another huge rate increase in NC. A lawmaker is pushing back. | Opinion

State Sen. Natalie Murdock had heard from her constituents about rising premiums for homeowners insurance and sudden policy cancellations after making a claim, but the issues became especially clear when it came to her mother.

“My mom last year was dropped from her insurance in Greensboro. She only filed one claim,” said Murdock, a Durham Democrat. “If you have a claim, you should have the freedom to file it.”

Murdock’s mother is one of many North Carolinians facing increasing difficulties with homeowners insurance. Premiums are rising and insurance companies are dropping some customers who have made claims, or who live in parts of the state that are at higher risk of being hit by hurricanes.

Citing hurricane risks in eastern North Carolina, Nationwide chose in 2023 not to renew 10,500 insurance policies. A similar purge is hitting western North Carolina after massive damage from Hurricane Helene.

In 2024, the North Carolina Rate Bureau, which represents insurance companies, requested an average statewide homeowners insurance rate increase of 42.2%. Under an agreement between the Rate Bureau and State Insurance Commissioner Mike Causey, the average statewide base rate was allowed to go up by 7.5% last year with another 7.5% hike coming this June. However, the state’s “consent to rate” law allows companies to charge more than the approved rate if the policyholder agrees.

Now the Rate Bureau is requesting a 68% average rate increase for dwelling insurance, which generally covers rental and vacation homes. A hearing on the request is scheduled for May 4.

The property insurance hikes come amid other rate increases in North Carolina, such as increases in auto insurance rates and a national spike in health insurance costs with the end of extra subsidies for health insurance under the Affordable Care Act.

“Somebody has to stand up for the consumers and say we got to get a handle on these costs,” Murdock said.

Murdock, a member of the Senate Finance Committee, wants the legislature to start by reviewing the increase in homeowners insurance. “We’re going to give it a closer look,” she said. “Not only is it unsustainable. It’s a crisis, but it’s just being unreported.”

Causey said he can use his office’s leverage to reduce requested rate increases, but higher insurance rates are inevitable as inflation and new technology drive up the cost of motor vehicles and their repairs and more expensive building materials raise the cost of fixing damaged homes.

“As the cost of everything has gone up, so have premiums,” he said.

The insurance commissioner said fraud and a high rate of claims are also adding to the costs.

Auto insurance rates in North Carolina, he said, reflect an increase in distracted driving, speeding and people not wearing seatbelts. “North Carolina has the third-highest speed-related deaths in the nation,” he said. “That’s concerning.”

As for homeowners insurance, Casey’s counsel is to hold off on making smaller claims.

“I tell people, if a limb falls on your roof, and it can be repaired for $2,000, you should not file that claim,” he said. “Even though you have insurance, save it for the bigger-ticket items. People don’t like to hear it, but these are things you can do to hold down your premiums.”

Joe Stewart, vice president of government affairs for the Independent Insurance Agents of North Carolina, said there are three measures that could reduce the cost of homeowners insurance: better land-use laws and stronger building codes, more state funding for fortified home roofs, and expanding flood insurance coverage while reducing flood risks by moving or elevating homes.

Murdock doesn’t accept that insurance companies are raising their rates all because of rising costs. “I don’t think we can say it’s just inflation,” she said. “They are still making billions in profits.”

She would like state lawmakers to get insurance companies, the insurance commissioner and consumer advocates together to explore causes and solutions.

“We’ve got to bring everybody to the table and do something about this,” she said.

Associate opinion editor Ned Barnett can be reached at 919-404-7583, nbarnett@newsobserver.com