Current:Home > MyHome insurers argue for a 42% average premium hike in North Carolina -FinanceAcademy
Home insurers argue for a 42% average premium hike in North Carolina
View
Date:2025-04-17 23:28:27
RALEIGH, N.C. (AP) — With many western North Carolina residents still lacking power and running water from Hurricane Helene, a hearing began Monday on the insurance industry’s request to raise homeowner premiums statewide by more than 42% on average.
A top lieutenant for Insurance Commissioner Mike Causey opened what’s expected to be multiple weeks of witnesses, evidence and arguments by attorneys for the state Insurance Department and the North Carolina Rate Bureau, which represents insurance companies seeking the increase.
In over 2,000 pages of data filed last January, the Rate Bureau sought proposed increases varying widely from just over 4% in parts of the mountains to 99% in some beach areas. Proposed increases in and around big cities like Raleigh, Charlotte and Greensboro are roughly 40%.
Across 11 western counties that were hit hard by Helene, including Asheville’s Buncombe County, the requested increase is 20.5%. The percentages are based on insurance payouts of years past and future claims projections.
After taking public comment, Causey rejected the request in February, prompting the hearing. In previous rounds of premium rate requests, the industry and commissioners have negotiated settlements before a hearing. Before the last such hearing in 2021, they settled on a 7.9% average premium increase after the bureau had sought 24.5%.
This time, Causey told reporters, “we were not able to come anywhere close. So that’s why we’re here today.”
When the hearing ends, the hearing officer, in consultation with Causey, will decide within 45 days whether the proposed rates are excessive, and if so, issue an order that sets new rates. That order could be challenged at the state Court of Appeals.
Rate Bureau attorney Mickey Spivey told hearing officer Amy Funderburk that the highest inflation in 40 years — particularly on building materials — combined with calamitous storms that are “getting worse and worse” show that current premium rates are “severely inadequate.”
Spivey cited Helene, which inflicted unprecedented destruction in the state’s western mountain communities, as well as Hurricane Florence in 2018, which caused billions of dollars of in damage in eastern North Carolina, much of it paid for by insurance companies.
Not mentioned Monday: Hurricane Milton, which grew explosively to a Category 5 hurricane while closing in on Florida on a path expected to mostly miss North Carolina.
“Whether you want to call it climate change or not, there is no denying that we are having bigger, stronger and more costly catastrophic storms than we’ve seen in any of our lifetimes,” Spivey said.
The Insurance Department’s attorney, Terence Friedman, argued that the industry continues to use actuarial methods that ignore what state law requires in calculating rates increases.
Friedman said the bureau’s requested rates are inflated and that the department’s actuaries will demonstrate there are ”alternative recommended rates that will allow the bureau’s members to earn what they’re constitutionally entitled to.”
But Spivey said the Insurance Department’s witnesses would seek to actually lower premium rates, or limit increases of less than 3%.
Without a fair profit and the ability to cover claims, Spivey said, the industry will have to invoke a legal exception more frequently, insuring high-risk homeowners only if they agree to pay premiums that are up to 250% of the Bureau’s rate. Otherwise, he said, more insurers will stop issuing policies altogether.
The “consent to rate” exception in North Carolina’s law has helped prevent a mass exodus of home insurers, as some states have experienced, said David Martlett, an insurance professor at Appalachian State University.
While each state has different models to regulate rates, those affected by more hurricanes and storms are essentially faced with two options, Marlett said: Allow rates to keep rising to cover claims, or “somehow we build structures that are able to withstand climate change.”
Friedman criticized the bureau for citing Helene in its opening statement, saying it shouldn’t be used as grounds to raise rates on the storm’s survivors. He also noted that most of Helene’s damage was caused by flooding, which is covered separately from the homeowners’ policies now being considered.
The proceedings are likely to continue after early voting begins on Oct. 17. Causey, a two-term Republican commissioner, is being challenged by Democrat Natasha Marcus, a state senator.
She held a news conference outside the Insurance Department headquarters criticizing Causey for declining to preside over the hearing, calling it a “ridiculous dereliction of one of his major duties in this job.” She also lamented that any decision will be made after Election Day.
Causey said he’s not hearing the case in part because he’s not an attorney. State law allows him to pick someone else to preside over the hearing, which is a quasi-judicial proceeding.
veryGood! (68)
Related
- Civic engagement nonprofits say democracy needs support in between big elections. Do funders agree?
- 'Never Have I Ever' is the show we wish we had in high school
- TikTok banned on U.S. government devices, and the U.S. is not alone. Here's where the app is restricted.
- Emily Blunt’s Floral 2023 SAG Awards Look Would Earn Her Praise From Miranda Priestly
- Apple iOS 18.2: What to know about top features, including Genmoji, AI updates
- A Korean American connects her past and future through photography
- Last Day to Get $90 Worth of Olaplex For $38 and Save 30% on Peter Thomas Roth, Murad, Elemis, and More
- Blake Lively Steps Out With Ryan Reynolds After Welcoming Baby No. 4
- Google unveils a quantum chip. Could it help unlock the universe's deepest secrets?
- Wes Anderson has outdone himself with 'Asteroid City'
Ranking
- Paula Abdul settles lawsuit with former 'So You Think You Can Dance' co
- NASA clears SpaceX Crew Dragon fliers for delayed launch to space station
- 'The Wind Knows My Name' is a reference and a refrain in the search for home
- 'Rich White Men' reinforces the argument that inequality harms us all
- Juan Soto to be introduced by Mets at Citi Field after striking record $765 million, 15
- Lady Gaga Sued by Woman Charged in Dog Theft Who Is Demanding $500,000 Reward
- Kate Spade 24-Hour Flash Deal: Get a $189 Wallet for Just $45
- Dwyane Wade Thanks Daughter Zaya For Making Him a Better Human at 2023 NAACP Image Awards
Recommendation
'Most Whopper
Lady Gaga Sued by Woman Charged in Dog Theft Who Is Demanding $500,000 Reward
Family Karma: See Every Photo From Amrit Kapai and Nicholas Kouchoukos' Wedding
The Hills' Kaitlynn Carter Gives Birth, Welcomes Baby No. 2 With Kristopher Brock
Senate begins final push to expand Social Security benefits for millions of people
Jane Fonda's Parenting Regret Is Heartbreakingly Relatable
Attorney General Merrick Garland makes unannounced trip to Ukraine
In 'You Hurt My Feelings,' the stakes are low but deeply relatable