North Carolina Insurers Want 19.6% Rate Hike for Dwelling Policies

The North Carolina Rate Bureau (NCRB) has requested a 19.6 percent rate increase on all dwelling insurance policies, according to a statement from the North Carolina Department of Insurance.

NCDOI announced Dec. 1 it is reviewing NCRB’s Nov. 30 rate increase filing. The North Carolina Rate Bureau, which is not part of the Department of Insurance and represents all companies writing property insurance in the state, requested a statewide average rate increase of 19.6 percent, varying by territory, with a requested effective date of July 1, 2017.

This filing includes a requested decrease of 16.6 percent for fire policies and an increase of 37.3 percent for extended coverage (wind) policies, for a total statewide average increase of 19.6 percent.

NCRB said the filing is necessary because of a settlement the Bureau reached in 2012 with NCDOI that raised rates by 13.2 percent over a three-year period. Tim Lucas, director of personal lines for NCRB, said that rate increase was far below the 20.5 increase insurers requested in 2011.

“We were well short of what we were requesting [then],” said Lucas. “A lot of what you are seeing in this filing is the leftover from what we requested before.”

Lucas said NCRB also changed its methodology for the cost of reinsurance, but that doesn’t mean the cost of reinsurance coverage has necessarily gone up. The bureau also used two cat models in determining the new rates as opposed to the one model it has used in the past.

Lucas said this increase is below the 27.5 percent increase actually needed for these policies, but the NCRB Board agreed to cap its territories at an average of 35 percent to negate a major rate hike for insureds.

“The increase is not what insurers need, but the board doesn’t want the individual consumer to essentially see an 80 percent increase… 19.6 percent is still a big number,” Lucas said.

Dwelling insurance policies are offered to non-owner occupied residences including rental properties, investment properties and other properties that are not occupied full-time by the property owner.

NCRB has also requested revisions to the current geographic rating territories. The proposed territory revisions are the same territory definitions applicable to homeowners’ policies that were approved in 2015.

NCDOI said the filing will be reviewed by Department of Insurance experts to determine what, if any, rate adjustments are warranted. If NCDOI and the NCRB do not initially agree on the proposed rate changes, a public hearing will be called in which both parties would present their cases for or against rate adjustments.

NCDOI said it will not rule on this filing until 2017.

Written comments will be accepted from Dec. 2 through Dec. 30, 2016.