North Carolina Homeowners Face Potential 42% Insurance Rate Hike Amid Recovery
As Western North Carolina residents continue to rebuild in the wake of Hurricane Helene, the insurance industry has proposed a statewide homeowner premium rate increase of over 42%. This substantial hike has prompted a hearing to address the contentious request.
Insurance Commissioner Mike Causey’s team and the North Carolina Rate Bureau are set to participate in a multi-week hearing, where witnesses will present evidence supporting or opposing the rate increase. A hearing officer, in consultation with Causey, will determine rate adjustments within 45 days of the proceedings’ conclusion.
The Rate Bureau’s data suggests increases ranging from 4% to 99%, depending on location. Western counties affected by Helene could see a 20.5% rise. This follows a previous negotiation that resulted in a 7.9% increase, down from an initial 24.5% request.
Citing high inflation and worsening storms, including Hurricanes Helene and Florence, the Rate Bureau argues that current rates are insufficient to cover claims and maintain fair profits. Conversely, the Insurance Department contends that the industry relies on outdated actuarial methods and proposes alternative rates aligned with constitutional entitlements. The department aims to lower rates or limit increases to less than 3%.
The hearing’s outcome could have significant implications for North Carolina homeowners. Final rates may vary based on additional factors, and a legal exception allows high-risk homeowners to pay substantially higher rates. There are concerns that insurers may exit the market if rates are not adjusted adequately.
This rate dispute unfolds against a backdrop of broader discussions on climate change and its impact on storm frequency and intensity. It also raises questions about North Carolina’s regulatory model compared to other states.
The timing of the hearing, coinciding with early voting and upcoming elections, has drawn criticism. Commissioner Causey has faced scrutiny for not presiding over the hearing personally, while his Democratic challenger, Natasha Marcus, has criticized both the timing and Causey’s absence.
Despite the controversy, state law permits Causey to appoint a hearing officer for this quasi-judicial proceeding, which will play a crucial role in determining the financial future of North Carolina homeowners.
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