Insurance Commissioner Mike Causey says the N.C. Department of Insurance has ended the legal dispute with the North Carolina Rate Bureau on its proposal for an 18.7 percent homeowners’ insurance rate increase. Commissioner Causey has negotiated an almost 14 percent lower rate for an average 4.8 percent increase statewide.
“I have negotiated a rate that will have minimal impact on the coast yet keep the state’s insurance companies financially sound,” said Commissioner 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.
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 a 12 percent increase.
In Johnston County, the maximum increase amounts were approved, meaning a 5.5 percent increase in homeowners’ insurance rates and 12 percent for tenants and condos.
This rate settlement will save consumers approximately $293 million in the first year alone, compared to the NCRB’s proposed increase.
The NCRB is separate from the NCDOI and is made up of insurance industry representatives. The Rate Bureau filed for the proposed 18.7 percent rate increase November 17, 2017, claiming the increase was necessary because of the increased costs stemming from tornado, severe thunderstorm, and windstorm/hail damage.
Commissioner 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 long, expensive hearing.
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.
The increase will take effect October 1, 2018.