An Oct. 7 court hearing date has been set for the North Carolina Rate Bureau’s (NCRB) request to massively raise homeowners’ insurance premiums after North Carolina Insurance Commissioner Mike Causey rejected the request.
At Tuesday’s Council of State meeting, he said that he has heard loud and clear from the public and legislators about the proposed 42% average rate hike, with the range as little as 4% in the mountains to over 99% at the coast.
“The Department of Insurance and I have received over 25,000 letters and emails and phone calls from people, and I know a lot of the other Council of State members have been hearing about it,” he said. “I’ve received letters from the legislature and the congressional delegation, and out of all of those 25,000 comments, almost nobody was in favor of their insurance company asking for an increase.”
A multitude of homeowners and others from across the state voiced their concerns at a public comment forum on Jan. 22 and over the past month by email and mail.
A bipartisan group of North Carolina Congress members, led by Republican Congressman Greg Murphy, NC-03, called on Causey to reject the NCRB’s request.
A letter written by Murphy said the proposed average 42.2% increase statewide would be devastating in light of inflationary pressures all North Carolinians are facing daily, especially for those in his district and all along the coast, where homeowners rates could rise between 71 and 99%. Colleagues Virginia Foxx, R, NC-05, Valerie Foushee, D, NC-04, Jeff Jackson, D, NC-14, David Rouzer, R, NC-07, Richard Hudson, R, NC-09, Don Davis, D, NC-01, Chuck Edwards, R, NC-11, and Wiley Nickel, D, NC-13, signed on to the letter.
“The proposed surge in homeowner insurance rates will crush Eastern North Carolinians, particularly those residing along the coast,” Murphy said in a press release. “Record inflation and historic interest rates have already skyrocketed the cost of living for folks across the country.”
Causey agreed, saying that although they heard from people across the state, they especially heard from those in the coastal regions.
But he also said that he did hear that insurance companies are also having a tough time, with some paying out more in claims than they are taking in.
“I heard from one Farm Bureau agency owner that said last year for every $100 they took in in premiums, they were paying out $112 in claims, so I know it’s tough in the homeowners’ market, so that’s not a sustainable path,” Causey said. “But when I hear from groups like AARP, they remind me that the increase in the cost-of-living adjustment from Social Security was only 3.2%, so that doesn’t jive with the average 42%.”
He added that he would like to see insurance companies do a better job of tightening their financial belts and holding down their expenses.
“The insurance companies have got to do a better job of rooting out fraud and reporting fraud,” Causey stated. “Our office is doing everything we can to go after insurance fraud that’s driving up our insurance cost. A lot of these roofing contractor scams, things like that, play into the mix.”
Causey said his office is recruiting other insurance companies to come to the state, especially in the counties east of I-95. Overall, he did say that the insurance market is still healthy and stable in the state compared to states like Florida and California.
Even with the court date set for October, he said it is possible that his office and NCRB could negotiate a settlement. What exactly that settlement number could look like, Causey said he isn’t sure.
“I’d like to see a $0, but I’m willing to listen if they want to come back with some numbers that are more reasonable to the people because the majority of people can’t stand this, and now insurance is all about risk and certainly if somebody’s in a higher risk area, they’ll have to pay a little more to somebody in a lower risk area, but there are a lot of factors at play here,” he commented. “We’ll see how it plays out.”
Causey said since he has been in office since 2017, he has always said no to rate increases to auto and homeowners’ insurance premiums.
In November 2020, NCDOI received a request from NCRB for a 24.5% increase in homeowners’ insurance rates. The filing resulted in a settlement between Causey and NCRB for an overall average rate increase of 7.9%.
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