Regulators hear arguments in insurance rate hike
RALEIGH, NC (WWAY) — Some coastal communities could face a 35 percent increase to homeowner’s insurance if proposed new insurance rates pass.
It was standing room only at a hearing in Raleigh as Insurance Commissioner Wayne Goodwin heard from both sides of the issue on Monday. The first side was the insurance companies.
“What we believe is the premiums that are being charged right now are inadequate based on the statutory constraints of North Carolina,” said Ray Evans, General Manager of the North Carolina Rate Bureau, which represents the insurance industry.
Town officials along the coast disagree with that argument.
“It’s several thousand dollars a year; 4, 5, $6,000 a year just for insurance. That’s significant and that impacts the local economy,” Emerald Isle Town Manager Frank Rush said.
With one area seeing a 2 percent percent decrease, the rest of the state will see an average increase of 25 percent. Evans said they received about $2 billion in premiums and spent about $1.8 billion on claims in 2011. He said that leaves about $200 million for profit, taxes, marketing, salaries and other expenses.
But those against the rate hikes said this increase could make homeowners choose between protecting their homes or paying the bills.
“Someone came to me and said, ‘You know, if insurance rates go up again, I’m going to have to drop my insurance coverage.’ They were a senior, on fixed income, and they said, ‘I have to make a decision, do I have insurance for my home for something that may happen or do I continue to get the medication and the food that I need on a weekly basis?'” Onslow County Manager Jeffrey Hudson said.
The hearing is expected to last a month.