North Carolina homeowners got a temporary reprieve from an 18.7 percent increase on home insurance rates Friday.
The state’s insurance commissioner, who sets rates, rejected the industry’s request and instead scheduled a July hearing to consider more evidence. The N.C. Rate Bureau, which represents the industry, in November had asked for a statewide increase averaging 18.7 percent, including an increase of 21.9 percent in Wake and Durham counties, and a decrease of 7.1 percent in parts of western North Carolina.
“We are not in agreement with the Rate Bureau’s proposed increases,” N.C. Insurance Commissioner Mike Causey said in a statement. “After hearing and reading the more than 9,000 comments from residents across the state and studying the figures in the filing, it is now necessary to hold a hearing to reach a resolution that will make the most financial sense for our residents and insurance companies.”
The N.C. Rate Bureau’s request was to take effect July 1, but now it will be delayed since Causey’s agency scheduled a hearing for July 23. The agency’s decision could be issued as late as October.
The filing represents about 100 insurers with about 2 million homeowners policies in North Carolina. The annual premiums on those policies total about $2.1 billion, and the requested rate increase would generate about $400 million in additional revenue, said Joanna Biliouris, the N.C. Rate Bureau’s chief operating officer. Biliouris said that the N.C. Rate Bureau capped the requested rate increase at 25 percent to limit the financial impact on policyholders.
The N.C. Rate Bureau said there has been no rate increase since 2012 and a rate increase is necessary to maintain the financial health of the industry.
The N.C. Rate Bureau and Department of Insurance can settle the matter at any time. If the case is not settled, Causey, a Republican elected to his first term last fall, would preside over the July 23 hearing and issue a decision. The Rate Bureau could appeal Causey’s ruling to the N.C. Court of Appeals and seek a hearing before the N.C. Supreme Court.
It is not unusual for the N.C. Rate Bureau to litigate over rates with the Department of Insurance. In 2014, the industry sought a 25.3 percent average statewide increase in home insurance rates. Then-Commissioner Wayne Goodwin held a hearing and decided not to raise rates. In 2012, the industry sought a a 17.7 percent rate increase and eventually settled for a 7.7 percent statewide average increase.