A North Carolina appeals court is weighing whether to reverse a decision that resulted in homeowners insurance prices going up by almost 30 percent along the coast and down by a third in inland counties.
A three-judge Court of Appeals panel heard arguments in a lawsuit by coastal communities trying to overturn a deal struck in late 2008 between former Insurance Commissioner Jim Long and the North Carolina Rate Bureau, which represents insurers.
The municipalities argued Long approved the increases before coastal residents knew insurers had requested them and set rates at unreasonably high levels.
Attorneys for the state agency and the Rate Bureau told the judges state law makes the insurance commissioner responsible for representing consumers, and rate settlements can’t be appealed to the court by anyone else.
“Suppose the commissioner gets it wrong?” Judge Linda Stephens wondered.
“I don’t know of anywhere else where an order can be issued and there’s no right to appeal that,” Judge Martha Geer said.
Long’s decision meant that beginning May 1 homeowners rates on coastal properties could jump 29.8 percent. The deal also cut premiums for homeowners in 32 western counties.
The rate changes included policies written by both private insurance companies and the Beach Plan, the state’s property insurance provider for coastal properties.
The General Assembly last summer shored up the overextended Beach Plan by capping potential costs to insurers and approving assessments against property owner in the state if a disastrous hurricane season hits. Some insurers had threatened to quit doing business in the state to limit their exposure to Beach Plan losses unless the program was bolstered.
Despite the rate increases and Beach Plan reforms, State Farm has now decided to stop writing on North Carolina’s barrier islands. The company is dropping about 1,600 policies that come up for renewal beginning May 1, as it looks to manage its exposure in catastrophe prone areas here and in other states.
Topics Pricing Trends North Carolina
Was this article valuable?
Here are more articles you may enjoy.
As Rates Rise, Majority of Homeowners Say Insurance Industry Is in Crisis: Survey 
Three Charged With Helping Agents Cheat on Florida Insurance License Exams 
German Insurtech Wefox to Replace CEO After Board Rejects Mubadala Sales Plan 
US Judge Skeptical of Biden Overtime Pay Rule From This Issue
