North Carolina Agrees to 4% Home Insurance Rate Hike

North Carolina Insurance Commissioner Jim Long today signed a settlement agreement with homeowners insurance companies allowing an overall statewide average increase of 4.05 percent in rates beginning May 1.

This is below the statewide increase than the 19.5 percent increase originally proposed by the insurers’ North Carolina Rate Bureau. Long said his deal is $238 million less in premium than what the industry sought.

“There has been a lot of speculation surrounding this homeowners rate filing, but I feel that we’ve reached a settlement that is fair to both consumers and insurance companies in North Carolina,” said Long. “No one likes to see their insurance rates go up, but the industry made a strong case for allowing some increases this year. The silver lining is that most consumers won’t see nearly the increases that were initially proposed.”

The settlement also realigns several insurance territories along the coast. The realignment divides former Territory 43, which included many of the coastal counties, into two separate territories — 43 West and 43 East.

“It makes sense to the department that homeowners who live farther inland should pay less for insurance because they have less exposure to the impact of a hurricane. The realignment of the territories kept this in mind and was a way to group the geographically-similar parts of the coastal counties, creating fairer rates for homeowners at the coast,” Long said.

The insurers’ filing cited rising construction and repair costs as among the reasons a rate hike was requested.

Meanwhile, a legislative panel was hearing testimony today on ways to fund and reform the state’s property insurer known as the Beach Plan. The Joint Select Study Committee On the Potential Impact of Major Hurricanes On the North Carolina Insurance Industry, chaired by Sen. Tony Rand and Rep. Hugh Holliman was scheduled to hear from representatives for agents and the insurance department.

North Carolina Homeowners Rate Revision by Territory 2009
The following is the breakdown of rate changes by territory showing the counties and cities in each rating territory, followed by the approved average percentage rate change and the resulting average premium. Examples are based on a frame home valued at $150,000 and insured under the HO-3 policy, Protection Classes 1 – 6.
The overall statewide average change is a 4.05% increase.

Currituck, Dare & Hyde 6.5%; $2,122
Brunswick, New Hanover, Onslow & Pender 17.5%; $2,342
Durham & Raleigh 5.0%; $663
Cumberland 4.0%; $850
Winston-Salem & Greensboro 3.0%; $562
Charlotte -4.0%; $529
Gaston, Mecklenburg & Union -6.0%; $499
Bladen, Columbus & Robeson 12.0%; $1,059
Brunswick, New Hanover, Onslow & Pender, Carteret 29.8%; $1,616
Beaufort, Camden, Carteret, Chowan, Craven, Currituck, Dare, Hyde, Jones, Pamilco, Pasquotank, Perquimans, Currituck, Dare, Hyde, & Pamilco 43 E 22.0%; $1,519
Beaufort, Camden, Chowan, Craven, Jones, Pasquotank, Perquimans, Tyrrell & Washington 6.5%; $1,327
Anson, Montgomery & Richmond 6.0%; $676
Bertie, Duplin, Gates, Greene, Hertford, Lenoir, Martin, Pitt, Sampson & Wayne 7.0%; $853
Caswell, Granville, Person, Vance & Warren -3.0%; $587
Edgecombe, Franklin, Halifax, Harnett, Hoke, Johnston, Lee, Moore, Nash, Northhampton, Scotland & Wilson 2.0%; $700
Chatham, Durham, Orange & Wake 2.0%; $625
Alamance, Davidson, Forsyth, Guilford, Randolph & Yadkin 2.0%; $560
Alexander, Alleghany, Ashe, Avery, Buncombe, Burke, Cabarrus, Caldwell, Catawba, Cherokee, Clay, Cleveland, Davie, Graham, Haywood, Henderson, Iredell, Jackson, Lincoln, Macon, Madison, McDowell, Mitchell, Polk, Rockingham, Rowan, Rutherford, Stanly, Stoke, Surry, Swain, Transylvania, Watauga, Wilkes & Yancey -1.2%; $480

Source: North Carolina Department of Insurance

Topics Pricing Trends North Carolina Homeowners