Insurance companies aren’t giving up on their quest to raise premiumson North Carolina homeowners by an average of 25 percent, according to an industry spokesman.
The group representing nearly 100 companies selling homeowners policies in North Carolina is appealing its rate-increase request after it was rejected by the state’s insurance regulator last month, Rate Bureau General Manager Ray Evans said. The group planned to file notice last week that it is taking the case to the state Court of Appeals.
The industry group expects it could take a year before the court renders a decision on whether the increases of about $500 million are justified, Evans said. Alternatively, insurers may file a new rate increase request with the state Insurance Department, he said.
“In the meantime, we still feel the rates are inadequate,” Evans said.
Insurance Commissioner Wayne Goodwin’s office had no immediate comment.
Goodwin determined last month after a hearing on the requested rate increase that “no factors or events justified the excessive costs requested by the insurance companies.”
Instead, Goodwin ordered a collection of regional rate hikes and decreases that added up to near zero average change on the statewide cost of policies taking effect in June. North Carolina homeowners saw a statewide average 7 percent increase last year. The new rates vary by geographic territory and type of insurance.
Homeowners in coastal counties that have seen years of rapid premium increases can anticipate reductions under Goodwin’s order. Insurers have warned that homes along the coast are under threat from hurricanes.
The Rate Bureau said it sought the increase to cover expectations of a sharp rise in projected repair and replacement costs and the growing risk of catastrophic losses from hurricanes and other severe storms.
Insurers are responding to premiums they think are inadequate to make their risk worthwhile by increasingly refusing to issue policies unless homeowners sign an agreement accepting rates higher than those set by Goodwin’s office.
Such policies increased last year to 30 percent of North Carolina’s $2.4 billion homeowners market, up from 23 percent in 2010, according to state Insurance Department data.
Was this article valuable?
Here are more articles you may enjoy.