North Carolina’s top state insurance regulator has signed an agreement allowing companies to raise homeowner’s insurance policies by a statewide average of 7 percent a year starting in July.
Insurance Commissioner Wayne Goodwin agreed to a rate increase for less than the 17.7 percent the North Carolina Rate Bureau requested in October. Goodwin said two weeks before the November election that decided whether he kept his job that companies would have to justify their request, which insurers had wanted to take effect in June.
“Homeowners insurance is a very complex issue. We face a great challenge in making sure that it is not only affordable, but available, to consumers across the state,” Goodwin said in a statement. “I feel this settlement helps strike that balance, and I am pleased that the increase will be significantly smaller than what insurers originally requested.”
The last homeowner’s insurance rate increase took effect in 2009. The insurance companies had sought a 19.5 percent statewide average increase, but settled for 4 percent.
Home insurance rates this year will be allowed to increase by as little as 1 percent in Winston-Salem and Greensboro. Charlotte homeowners could see their costs climb by 8.4 percent, raising the premium on a $150,000 frame home by $45 to $574 for a yearly policy. Durham and Raleigh rates would be allowed to climb by 2.8 percent, pushing premiums to $682 for a $150,000 home.
But homes along the beach in Brunswick, Carteret, New Hanover, Onslow and Pender counties could be hit by a premium of as much 19.8 percent. Beach homes in Currituck, Dare and Hyde counties could see a 17 percent rate increase.
State insurance regulators determined much higher rate increases for beach homes were appropriate because insurers faced higher costs of backing hurricane risks, Goodwin’s office said, and out of concern about companies dropping coverage and making it less available along the coast.
The settlement eliminates the need for a June hearing where the companies and Insurance Department staffers were scheduled to present arguments for and against the industry’s October increase request.