The North Carolina Department of Insurance has reached a settlement with the North Carolina Rate Bureau on homeowner insurance rates that will increase rates statewide by an average of 4.8 percent.
The agreement between the two parties effectively ends the legal dispute that began late last year when NCRB requested an 18.7 percent homeowners’ insurance rate increase.
“I have negotiated a rate that will have minimal impact on the coast yet keep the state’s insurance companies financially sound,” said North Carolina Insurance Commissioner Mike Causey. “On the Outer Banks, residents with a $200,000 home will see an average rate that is more than $400 less per year than what the NCRB originally proposed,” Causey added.
NCDOI said the 4.8 percent increase will vary according to territory with a cap of 5.5 percent statewide instead of the 25 percent bump on the coast initially proposed by the NCRB. For instance, in Currituck County on the Outer Banks, residents who insure a $200,000 frame home will see an average $120 difference in their annual premium or $10 per month.
The agreement also covers insurance for tenants and condominiums, which is capped at 12 percent.
The NCRB, which represents homeowners insurance companies in the state, filed for the proposed 18.7 percent rate increase Nov. 17, 2017, claiming the increase was necessary because of the increased costs stemming from tornado, severe thunderstorm, and windstorm/hail damage. The last time homeowners saw an insurance rate increase was in 2012. At that time, the NCRB case was settled for an average statewide increase of 7 percent.
According to NCDOI, Causey had concerns over the initial filing and set a July 23, 2018, hearing date for the case to be decided if an agreement couldn’t be reached. Over the last several months, the Department and the NCRB have been in litigation while trying to settle the case without the necessity of a hearing where a hearing officer would rule on the rates.
NCDOI said this rate settlement will save consumers approximately $293 million in the first year alone, compared to the NCRB’s proposed increase. The increase will take effect on all new and renewal policies on Oct. 1, 2018.
Insurers may deviate from the NCRB rates if a proposed deviation is filed with the NCRB and filed and approved with the commissioner.
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