North Carolina: Insurance industry proposes 30% increase in Homeowner Insurance Rates

CRAVEN COUNTY IN THE 30% INCREASE ZONE!

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NEW BERN, N.C. -- Insurance companies have proposed an 18 percent hike in homeowners’ insurance rates throughout the state next year.

The North Carolina Department of Insurance will decide next month whether to approve the North Carolina Rate Bureau’s request to increase insurance rates. If approved, the increase would take effect on policy renewals or new policies taking effect in June 2013.

“I think an increase at this time, given the economy, given everything else, people are out of work, an increase at this time is totally unacceptable,” said Gerard Cormier, a New Bern homeowner.

Homeowners on or near the coast could see the highest rate increases. The North Carolina Rate Bureau has proposed that rates for them go up by 30%. The bureau claims coastal counties are at higher risk for hurricane damage.

The proposed increase of 30 percent would affect 18 counties, including Craven, Carteret, Pamlico, Jones, and Onslow. Advocacy group NC 20 says coastal counties are being discriminated against.

“Thirty percent is huge,” said Tom Thompson, chairman of NC 20. “The cost of homeowner’s insurance on the coast is already five times higher than in the Piedmont section of the state.”

The proposal could also increase renter’s and condo insurance on the coast by 30%. The state insurance department is collecting public comment on the proposal till October 19.

The North Carolina Rate Bureau has requested rate increases four times since 2002, ranging from 12 percent to nearly 22 percent. Each time, state insurance officials knocked those increases down to much more modest ranges, from 2.2 percent to 5.4 percent, said Ray Evans, director of the North Carolina Rate Bureau.

Cormier expects a similar outcome for this rate proposal.

"The strategy that people like that use is you ask for a ridiculous amount of an increase, and then when everything is settled, they get their full three or four percent increase that they wanted to begin with," said Cormier. "It gives people a false sense of happiness. People feel 'We beat them, they asked for 30 percent, we only gave them three percent.' But it's all part of insurance companies' strategy."

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