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NC court rejects appeal of coastal insurance jump

READ MORE: NC court rejects appeal of coastal insurance jump

RALEIGH, NC (AP) -- A North Carolina appeals court is rejecting a bid to freeze or even reverse homeowners' insurance premiums that soared by nearly 30 percent on the coast while falling in a third of the state's counties farthest from the shore.

A three-judge Court of Appeals panel ruled Tuesday in a lawsuit by coastal communities trying to overturn a 2008 deal struck between former Insurance Commissioner Jim Long and the North Carolina Rate Bureau, which represents insurers.

The municipalities argued Long made the deal before coastal residents knew insurers sought increases, which the cities said were then set at unreasonably high levels.

The court says it can't overturn the deal because the agreement didn't meet the legal standard of being excessive or unreasonable.

(Copyright 2010 by The Associated Press. All Rights Reserved.)



First of Several Homeowners Insurance Cases Ruled on by N.C. Court of Appeals

Wilmington, N.C. - In a 3-0 decision handed down on April 20, 2010, the NC Court of Appeals dismissed one of the three cases pending before the NC Court of Appeals regarding the 2008 homeowners insurance rate increases. This decision refers to case 09-701 which was heard by the Court of Appeals on January 14, 2010 by judges Calabria, Geer and Stephens. This challenge was a direct appeal to the Court of Appeals filed in late 2008 by Dare County, et al.

By its plain language, N.C. Gen. Stat. § 58-2-80 does not apply to the Consent Order. Since a direct appeal of the Consent Order to this Court is not authorized by statute, this Court lacks subject matter jurisdiction to hear this appeal. The instant case must be dismissed.

Effectively, the Court has decided that the Coastal Counties, coastal citizens and other impacted parties do not have the ability to make a direct appeal to the Court of Appeals for a rate decision by the Department of Insurance and the Rate Bureau. Since this route is not authorized by statute, the Court does not have the jurisdiction to hear this appeal. This is an unfortunate decision, but the remaining legal challenges heard last week remain in play.

Oral arguments were held last week at the N.C. Court of Appeals in the remaining homeowner’s insurance cases brought by the coastal counties. The cases heard by the Court of Appeals were case 09-1171 and case 09-1172, which were combined in November 2009.

These cases are the continuation of challenges to the Commissioner of Insurance and Wake County Superior Court regarding the massive homeowners insurance increases approved in 2008. For some coastal citizens these increases meant a 30% increase in basic homeowners insurance.

“In spite of these legal challenges, the cumulative impact of continued homeowners insurance increases are tremendously detrimental to our coastal communities and eastern North Carolina as a whole. To mitigate further increases, the Business Alliance for A Sound Economy (BASE) worked with local governments, state lawmakers, citizens and industry partners to pass legislation that would create a compromise on the increases to the Beach Plan during the last legislative session. However, the increases to homeowner’s insurance rates still remain unchanged thus leading the coastal counties to take legal action,” said Donna Girardot, CEO of BASE.

“BASE has maintained that we need statewide equity in homeowners rates, affordability and availability for consumers and a stable and predictable environment to encourage companies to write policies statewide,” adds Girardot. “We also believe there should be a venue for our voices to be heard during the ratemaking process.”
Dare County led the charge in hiring the Williams Mullen Law Firm to initiate four separate legal proceedings, including a lawsuit and an appeal to the North Carolina Court of Appeals, challenging Beach Plan increases and homeowners rate increases as approved by the NC Department of Insurance in late 2008. A number of local governments, including the Town of Southern Shores, Duck, Nags Head, Kill Devil Hills, Pine Knoll Shores, Emerald Isle, Indian Beach, Kitty Hawk, Surf City, and the Counties of Dare, Currituck, Beaufort, New Hanover, Pender, Brunswick, Craven, Carteret, Hyde, and Washington agreed to join the challenges as named parties and to provide financial support.

However, in April 2009, another trial court's order dismissed the appellants (Dare County, et al) petition for review for lack of subject matter jurisdiction and lack of standing. This judgment was made by Wake County Superior Court Judge Ronald Stephens. Now it is up to the Court of Appeals to decide on case 09-1171 and case 09-1172.

For questions, a copy of the legal documents or additional information, please contact BASE at (910)799-2611 or visit

BASE (Business Alliance for a Sound Economy) is a coalition of trade associations and numerous independent businesses, formed to take collaborative action on issues of concern to their broad membership engaged in residential and commercial real estate sales, home building, land development, economic development, finance, property management and leasing. BASE represents numerous independent businesses and the approximately 12,000 members of the Brunswick County Home Builders Association, the Brunswick County Landowners Association, the Pitt County Economic Development Partnership, the Topsail Island Association of REALTORS® and the Wilmington-Cape Fear Home Builders Association.

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no offense ya'll, but when

no offense ya'll, but when you build homes on the water, worth one and two million dollars, you can afford to insure it. Look at how much the houses that fell during the hurricanes cost ALL of us, because the city of Wrightsville Beach permitted people to build in high risk flood zones. Not to mention, the beach shacks are worth half a million and up now, and I dont hear anyone complaining about that. I am a Wilmington native, if you are going to soak up the luxuries of building on the beach, you should be the ones paying. I dont agree those of us living inland should all have to pay for the city built on top of our dunes, that is where I get upset. Just think about how much those insurance companies paid those who had to rebuild, I am sure the recipients were feeling rather grateful in those moments.

Unfair rates

Not on the beach/island/water. Home value $229000.00. My deductible for damage from hurricane 2% of my home value; any other type of damage $1500.00. Why should there be a difference in my deductible. State Farm has gotten paid VERY well over the last 14 years that I haven't used one penny of my insurance. I've lived here 14 years; never filed a claim, never had any damage. Insurance rate $3700.00 a year. The damage in my area has all been inland in counties that were flooded. Why is my rate higher then there's? Why not determine cost by who's using the insurance (like car insurance)? If I haven't had to use my home owners insurance why am I paying more than those who use it every year?

Let's examine your comments.

"State Farm has gotten paid VERY well over the last 14 years that I haven't used one penny of my insurance."

>Insurance is risk management.

"Why is my rate higher then there's?"

>Because your home is located in an area that is a higher risk for wind damage. Inland counties aren't.

"If I haven't had to use my home owners insurance why am I paying more than those who use it every year?"

>Anyone who "uses" their insurance every year, which I doubt there are many, are dropped by their insurance company after incurring a few claims.

My home isn't on the water,

My home isn't on the water, but I live in Virginia Beach in a $200K home and my insurance went up 30% and I'm not in a flood zone or anywhere near the beach. Virginia Beach is a very large city and I don't believe it should increase for the entire state. I agree if you build on or near the water, but for the rest of us its not fair or justified. I guess it should go up for those people in the tornado alley, those on the West coast because of the fires, you name it. I've had my insurance since 1988 and never filed a claim, so they've just been taking my money and now they want more. I need to start filing some claims to get my money back!

Rate hikes

My home isn't on the water either.
Located in Beulaville, NC my rate went up 31% which is crazy.

Something has to be done about this.

So 30% + is not excessive ??

So 30% + is not excessive ?? Alright then reduce those Judges pay by 30% and see if that is excessive.. That could help with the state deficit ..

As previously noted

what other outcome could there be? The insurance industry followed the statuties; the consumers waited until the rates were in place to squeal. Sort of like trying to close the barn door after the horse has gotten free.

But there will be posts aplenty placing all the blame on the industry.

Did you REALLY expect any different?

Anyone blindfolded, deaf and illiterate could've guessed this outcome. Insurance companies are going to get their way, no matter what!

Where do you think all of that campain money that our "elected" officials comes from?