North Carolina Requests Insurers Defer Premium Payments to Help Consumers

North Carolina Insurance Commissioner Mike Causey has activated an emergency declaration that gives policyholders in all 100 counties the option to defer insurance premium payments should they need to do so. The order was activated March 27 as a result of the state’s major disaster declaration from the federal government due to the current coronavirus outbreak.

The commissioner’s order applies to all insurance companies defined in the North Carolina statute including health insurance, residential property and automobile insurance. This order also applies to collection agencies, motor clubs and premium finance companies licensed by the North Carolina Department of Insurance. The order will defer not only premium payments but will also defer statutory time requirements. Notices of cancellation, for example, will be deferred.

NCDOI said the order requires insurance companies to give their customers affected by the COVID-19 health emergency the option to defer premium and debt payments. It is up to the customer to notify their insurance company of their desire to exercise the option to defer premium and debt payments.

Should the consumer choose the option to defer, companies may not process cancellations. No additional fees or penalties may be imposed should the consumer choose this option. The deferral under the order includes not only premium and debt payments but cancellations and proof of loss requirements, as well.

The law does not allow for a premium “holiday” or a “waiver”. Premium payments will still need to be paid, but this allows a 30-day deferral or delay of the premium to give impacted consumers extra time to arrange for payment. Insurers must allow insureds to defer or delay payments that are due during the period of the order, NCDOI said.

Once the deferral expires, policyholders will be required to bring their payments current to avoid cancellation. Insurers will not pay claims on policies that are in arrears.

“My hope is this deferral will provide policyholders breathing room while they get back on their feet as a result of economic hardships due to the COVID-19 health emergency,” Causey said.

NCDOI noted that prior to the federal disaster declaration, many companies were working with their clients to extend grace periods for late payments. This order, however, will require all companies to defer payments as required by the statute.

Consumers are encouraged to check with their insurance company or representative to determine how this order affects their insurance policy. The order expires April 26, 2020.

NCDOI provided a FAQ document related to the order.

Topics Carriers North Carolina