StarNews Editorial: Homeowners insurance rates just went up, and insurers seek another increase

The N.C. Rate Bureau wishes you a happy new year – by seeking another increase in homeowners insurance premiums. It’s been only six months since the last increase, an average of 7 percent, took effect. Now insurers want to raise the rates again.
Although the rate increase averages 25.3 percent statewide, the requested rate changes range from a 2.7 percent reduction to 35 percent increase, depending on location and other factors.

But this time, miracle of miracles, residents of far inland parts coastal counties, including New Hanover, Brunswick and Pender, may see a small rate reduction. Those living closer to but not necessarily at the coast could see a 35 percent jump. But the highest rate increase also would apply in some parts of the piedmont and mountains, which historically have seen smaller hikes.

Homeowners in coastal counties have been overwhelmed by higher insurance rates over the past few years, and it appears that efforts to build some fairness into the system are starting to take shape.

The rate adjustments are not applied across the board, however, and in past years the coastal region as a whole was hit much than other places for standard coverage against such disasters as fire, theft, flooding water heaters, accidents and other damage not related to storms, floods or high winds. On average, residents well inland have paid significantly less for that coverage than coastal residents.

Are we to believe that living within a few miles of the coast puts a homeowner more at risk of fire, burglary or having someone trip and fall on a cracked sidewalk?

An effort five or six years ago to build more sense and consumer protections into the rate-setting process led to some reforms, including a requirement to hold a public hearing if the insurance commissioner rejects the Rate Bureau’s request. The bureau represents insurers who write homeowners policies in North Carolina.

At the time some coastal counties also were divided to prevent inland residents of those counties from absorbing the largest rate increases.

But the rates keep going up, and there is still plenty of room for improvement. The last rate increase was approved in 2012 and took effect in July 2013. Public hearings were held, but a compromise reduced the initial request of 17.7 percent to a 7 percent average increase.

Insurance Commissioner Wayne Goodwin was right to be “appalled” at the nerve of the insurance industry to ask for a rate increase so soon after the July rate hike, and has said he won’t compromise this time. He called for the Rate Bureau to withdraw its request. Whether his actions back up those words remains to be seen.

But North Carolina homeowners have a right to speak up. A public comment session is already set for 9:30 a.m. to 4 p.m. on Jan. 24 in the Jim Long Hearing Room of the Dobbs Building, 430 N. Salisbury St., Raleigh. Residents also may submit written comments by email at 2014homeowners@ncdoi.gov , or by mail at NCDOI, Attn: Bob Mack, Property & Casualty Division, 1201 Mail Service Center, Raleigh, NC 27699-1201.

This is your opportunity to tell state officials what’s on your mind.

Reasonable, well-spaced requests increases are justifiable, but homeowners’ pockets aren’t deep enough to sustain an assault of large, back-to-back rate hikes. (Wilmington StarNews, January 7, 2014)