NC Insurance Rate Hike Possible on Rentals, Second Homes
By Michelle Bliss
07-21-11 – The state Department of Insurance is holding a public hearing on Monday in Raleigh regarding a 20% rate increase that insurance companies are requesting for second home and rental property policies.
WHQR's Michelle Bliss reports that if the increase goes through, the average coastal property owner with dwelling fire and extended coverage plans would be charged an additional $205 a year.
The average property insurance policy in North Carolina costs $450. With the proposed rate increase, coastal owners would face the highest fees, while other policy holders across the state would pay an average of $85 extra annually.
Ray Evans is the general manager of the North Carolina Rate Bureau, a state-wide partnership of insurance companies that's filing the request. He says projected wind storm damage is to blame.
"Every year, throughout North Carolina, there are hail storms, tornados, and thunderstorms. We don't know when they're going to occur, nor do we know what the intensity is going to be, but we do know that we're going to have them."
He says the Rate Bureau uses data on hurricane damage dating back to 1851 to project future expenses.
"The coast, while not targeted in any way, no matter how you model the hurricane exposure, the coast is much more vulnerable to significant damage from a hurricane than the remainder of the state."
The state Insurance Commissioner Wayne Goodwin is holding the public hearing and will have final say on the matter. The hearing is open, but a public comment period has ended with more than 800 responses submitted to the state Department of Insurance.
The Department of Insurance has issued a statement saying that the Rate Bureau's hurricane model does not appear to be adequately documented or justified. The department is countering the request and has issued a statement that the increase is not justified based on data provided by the Rate Bureau.
Learn about the rate filing public hearing on Monday in Raleigh.
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