The insurance industry in North Carolina is seeking a significant increase in homeowner premium rates following the aftermath of Hurricane Helene. The proposed rate increase averages more than 42% statewide, with variations depending on the location. Insurance companies, represented by the North Carolina Rate Bureau, filed a request for the increase based on past insurance payouts and future claims projections. The proposed increases range from just over 4% in some mountain areas to as high as 99% in beach areas, with big cities like Raleigh, Charlotte, and Greensboro facing roughly a 40% increase.
Following Insurance Commissioner Mike Causey’s rejection of the rate increase request in February, a hearing has begun to determine the legitimacy of the proposed increases. Typically, negotiations between the industry and the commissioner lead to settlements before a formal hearing, but in this case, an agreement was not reached. The hearing is expected to last several weeks, with witnesses, evidence, and arguments presented by both sides. Once the hearing concludes, a decision on whether the proposed rates are excessive will be made within 45 days, and new rates may be set by the hearing officer, which could potentially be challenged in court.
The rate increase request is fueled by the insurance industry’s assertion that current premium rates are inadequate due to factors such as inflation and the increasing frequency of catastrophic storms. Hurricanes like Helene and Florence have caused significant damage in different parts of North Carolina, leading to major insurance payouts. The industry argues that without the proposed rate increases, insurers will struggle to cover claims and may be forced to stop issuing policies altogether. The debate between the Insurance Department’s attorney and the Rate Bureau’s attorney revolves around the accuracy of actuarial methods in determining the necessary rate adjustments.
The ongoing hearing has become a point of contention in the upcoming election for Insurance Commissioner in North Carolina. Republican incumbent Mike Causey, who is overseeing the hearing, is being challenged by Democrat Natasha Marcus. Marcus has criticized Causey for not presiding over the hearing himself and raised concerns about the timing of the decision, which is expected to be made after Election Day. The outcome of the hearing and the subsequent decision on premium rates will have a significant impact on homeowners in the state, particularly those affected by recent natural disasters. The debate highlights the complexities of balancing insurance industry needs with ensuring fair rates for policyholders.
