Negotiated rate increase less than half of insurance companies’ request
Press release from the N.C. Department of Insurance, shared March 5:
RALEIGH — Insurance Commissioner Wayne Goodwin on Tuesday signed a settlement agreement with homeowners insurance companies allowing an overall statewide average rate increase of 7 percent, varying by territory and form, beginning July 1. The insurance companies, represented by the North Carolina Rate Bureau, had requested an overall statewide average rate increase of 17.7 percent on Oct. 1, 2012. The difference between the requested and settled rates amounts to $237 million in savings to policyholders.
As Department of Insurance experts spent months studying the insurance companies’ request, it became apparent that some increase was justified, largely due to the steadily rising cost of reinsurance related to hurricane risks and ongoing concerns regarding availability. In order to minimize the increase, the Department of Insurance elected to settle on rates, eliminating the need for the hearing scheduled for June 3.
“Homeowners insurance is a very complex issue. We face a great challenge in making sure that it is not only affordable, but available, to consumers across the state,” said Goodwin. “I feel this settlement helps strike that balance, and I am pleased that the increase will be significantly smaller than what insurers originally requested.”
The last homeowners insurance rate filing occurred in 2008 when the insurance companies requested a 19.5 percent statewide average increase. A settlement agreement allowed for a 4.05 percent statewide average increase to go into effect in May 2009.