State Insurance Commissioner Wayne Goodwin signed an agreement with homeowners insurance companies Tuesday allowing a statewide average rate increase of 7 percent beginning July 1.
But the agreement allows rates to go up by 17 percent on the Outer Banks sections of Dare, Currituck and Hyde counties.
The insurance companies, represented by the North Carolina Rate Bureau, had requested a statewide average rate increase of 17.7 percent last October, including a rise of 30 percent for most of northeastern North Carolina.
The N.C. Department of Insurance said the average annual premium for $150,000 of coverage on the Outer Banks is currently $2,122. The new rate starting July 1 will move that premium to $2,482.
Examples include wind and hail coverage. If an insurer excludes wind and hail, coverage is provided under the beach plan, which includes an additional 5 percent surcharge.
Goodwin said that while NCDOI experts spent months studying the insurance companies? request, it became apparent that some increase was justified, largely due to the steadily rising cost of reinsurance related to hurricane risks and ongoing concerns regarding availability.
Mainland areas of Currituck, Dare and Hyde will see an increase of 3.4 percent, or about $52 a year for $150,000 of coverage.
Bertie, Gates, Hertford, and Martin will jump by 7.4 percent. Beaufort, Camden, Chowan, Pasquotank, Perquimans, Tyrrell and Washington will only get bumped up by 1 percent.
The difference between the requested and settled rates amounts to $237 million in savings to policyholders, according to a news release.
In order to minimize the increase, the Department of Insurance elected to settle on rates, eliminating the need for the hearing scheduled for June 3.
?Homeowners insurance is a very complex issue. We face a great challenge in making sure that it is not only affordable, but available, to consumers across the state,? said Goodwin. ?I feel this settlement helps strike that balance, and I am pleased that the increase will be significantly smaller than what insurers originally requested.?
In a statement Tuesday, state Rep. Paul Tine, D-Dare, criticized the decision, saying there is no data to show that inland areas are shouldering the cost of coastal losses.
?Our economy in the East is suffering while our cost of living continues to rise,? he said. ?It is long past time that we develop a fair rate system that is based in historical data, not conjecture.?
The last homeowners insurance rate filing occurred in 2008 when the insurance companies requested a 19.5 percent statewide average increase.
A settlement agreement allowed for a 4.05 percent statewide average increase to go into effect in May 2009.
Additional resources from the NCDOI:
Homeowners insurance settlement agreement
Homeowners rate revisions by territory
North Carolina territory map
Source: http://outerbanksvoice.com/2013/03/05/homeowners-insurance-on-obx-to-increase-17-percent/
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