Buncombe County homeowners have faced rising insurance rates in recent years – and if insurers have their way, owners will see an increase of more than 20 percent. The changes could affect not only homeowners but also renters and the inventory of available, affordable housing.
Earlier this month, the North Carolina Rate Bureau, which represents insurance companies, asked the state Department of Insurance to increase homeowners’ insurance rates by an average of 42.2 percent across the state. The proposed changes would take effect on Aug. 1.
In coastal areas of the state, the requested increase is as high as 99.4 percent.
In Western North Carolina, insurers want increases ranging from 4.3 percent in Haywood, Madison, Swain and Transylvania Counties to 20.5 percent in Buncombe and 10 other counties: Alleghany, Ashe, Burke, Caldwell, Catawba, Henderson, McDowell, Polk, Watauga and Yancey.
The increases are driven by the nationwide impact of climate change and inflation, industry experts say.
“The worst year in insurance losses – with the most billion-dollar-plus catastrophic weather events – took place in 2023,” Matt Juengel, who owns an independent insurance agency in Asheville, told BPR Tuesday. “And before that, the worst year was 2022. So what that means is the insurance companies are paying out more money than they ever expected to be paying out, and the rate increases are a direct result of that.”
Climate disasters such as flooding, wildfires and hurricanes have taken a tremendous toll on many parts of the United States in recent years, with total damage in excess of $257 billion for 2022 and 2023 combined, according to the NOAA National Centers for Environmental Information.
In a report released in September 2023, the New York-based nonprofit research group First Street Foundation estimated that 39 million properties across the United States “have risk of increasing insurance prices or reduced coverage due to high climate risk.”
Even in areas not directly subject to high climate risk, the study’s authors noted, “there are tens of millions of properties across the U.S. that are just starting to see the impact of climate-adjusted insurance pricing on their cost of homeownership and property valuation.”
Inflation, meanwhile, hit record highs in 2022 and has continued to drive a rise in the overall cost of living.
North Carolina’s homeowners insurance rates were last raised in June 2022, when most Western North Carolina counties experienced a 5.9 percent increase.
The North Carolina Rate Bureau historically requested a high rate, in anticipation of a negotiation with the state Department of Insurance. In 2022, the Rate Bureau proposed an average statewide increase of 24.5 percent, which was eventually negotiated down to 7.9 percent.
The Department of Insurance and the North Carolina Rate Bureau did not immediately respond to requests for comment from BPR.
Under state law, the Department of Insurance has 50 days to respond to the Rate Bureau’s proposal, after which the matter would likely head to a public hearing.
Director of housing policy for the North Carolina Housing Coalition Stephanie Watkins-Cruz encouraged members of the public to participate in listening sessions hosted by the state next Monday.
“This does affect communities all across our state,” Watkins-Cruz said during the group’s weekly Housing Call on Jan. 9.
The soaring cost of housing is already a fraught issue in Western North Carolina. Last week, the Asheville-based nonprofit Just Economics WNC announced that the living wage rate in Buncombe County for 2024 increased to $22.10 an hour, a nearly 10 percent increase compared with the previous year.
The figure represents the minimum wage that would allow an individual working full-time to qualify to rent a one-bedroom apartment.
Juengel, the independent insurance agency owner in Asheville, said that over the past nine years, he has tried to proactively reach out to clients whenever their insurers sought to increase their rates by 10 percent or more. Recently, he said, the rise in double-digit rate increases has prompted him to raise that target to 20 percent.
“We're getting record numbers of our policies coming back with 20 percent or greater rate increases that we’re then turning around and trying to re-shop and remarket and help our clients out,” Juengel said. “The last nine months has been a real struggle, and I'm told the next nine months is going to be a big struggle.”
HOW TO WEIGH IN:
- The North Carolina Department of Insurance will hold an in-person listening session for members of the public in Raleigh on Jan. 22 from 10 a.m. to 4:30 p.m. The session will take place in the Albemarle Building, 325 N. Salisbury St., Raleigh, N.C. 27603.
- The department will also hold a virtual public comment session that same day, Jan. 22, from 10 a.m. to 4:30 p.m. Members of the public can attend that session here.
- Public comments can also be e-mailed to the department at 2024Homeowners@ncdoi.gov or sent by mail to Kimberly W. Pearce, Paralegal III, 1201 Mail Service Center, Raleigh, N.C. 27699-1201. All comments must be received by Feb. 2.
