Despite urging by the state’s insurance commissioner that they withdraw their bid, North Carolina homeowners insurers are unlikely to withdraw their request for a 25.3 percent average rate hike.
The data supports the requested increase, according to Ray Evans, general manager of the North Carolina Rate Bureau, and as a result Evans says he does not believe the insurers that are members of the bureau will drop their case.
“As the filing includes complete testimony from our experts to support the detail we are essentially ready for a hearing at the time of the filing,” Evans told Insurance Journal.
He said the “actuarial detail” suggests premiums are “substantially inadequate” right now. “This is the reason the filing requests a change as large as it is,” he said.
North Carolina Insurance Commissioner Wayne Goodwin has called for the insurers to withdraw the filing, saying he is “appalled” they would seek a raise so soon after a July increase went into effect.
The industry’s rate bureau, which represents all companies writing homeowners insurance in the state, has requested a statewide average rate increase of 25.3 percent, varying by territory, with a requested effective date of Aug. 1, 2014. The requested rate changes range from -2.7 percent to +35 percent. The insurance companies have also requested revisions to the current geographic rating territories.
Goodwin said there will be a public comment session on Friday, Jan. 24, 9:30 a.m. to 4 p.m. in Raleigh on the filing.
“I urge North Carolina homeowners to take advantage of the public comment period and let their insurance companies know what they think about the notion of another homeowners insurance rate increase,” said Goodwin.
He made it clear he will hold a complete public hearing and not agree to a settlement if insurers proceed with their filing.
“New homeowners insurance rates went into effect in July 2013. I am appalled that the insurance companies would request another increase just six months later. I believe the insurance companies should withdraw this rate filing immediately. If they do not, the insurance companies should expect a full hearing on this matter; I will not entertain any settlement negotiations,” Goodwin said.
According to Evans, the industry has had five filings approved by the Department of Insurance since 2000. He said one of his bureau’s goals is to begin “filing more frequently, once a year, rather than one every 3-5 years with the notion that each would be smaller.”
Last March, Goodwin signed a settlement agreement with insurers allowing an overall statewide average rate increase of 7 percent beginning July 1. The bureau had requested a 17.7 percent increase on Oct. 1, 2012. The difference amounted to $237 million.
Before the July increase, the last homeowners insurance rate filing occurred in 2008 when the insurance companies requested a 19.5 percent statewide average increase. A settlement agreement allowed for a 4.05 percent statewide average increase to go into effect in May 2009.