NC Insurance Commissioner pushes back against 42% rate increase for property insurance

RALEIGH, N.C -- North Carolina Insurance Commissioner Mike Causey is pushing back against the state rate bureau after they asked for a hike in insurance rates.

Early this month Causey rejected the insurance industry's request for a high rate increase for North Carolina homeowners.

Insurance companies petitioned this year for a 42% rate increase statewide, alongside a 99% increase for property owners in some parts of eastern North Carolina, specifically on the coast.

A court date is set for Oct. 7.

"The request that was made in many parts of the state was excessive and unfairly discriminatory to certain sections of the state," Causey said. "It was a large disparity in where people lived. It ranged from 4% in some of our mountain counties to close to 100% on the coast."

However, issues could be resolved before then if Causey and the industry representatives agree on a smaller number that both sides are comfortable with.

The proposed insurance rate hike comes at a time when inflation continues to rise. The latest data shows a 3.4% increase from last year.

Following the initial rate increase request, property owners across the state reached out to voice their concerns.

"Inflation's already killing us. Our taxes are up. Groceries are up. Fuel prices are up. Our paychecks not up. So, we're struggling to make ends meet. That's what I heard from people," he said. "I'm asking the insurance companies to do some soul-searching and cut their expenses. Look at cutting back some of these exorbitant salaries. For their CEOs and top executives and get tough on insurance fraud."

Causey, who is in his second term and faces two challengers in the March 5 Republican primary, said he and the department received more than 25,000 emails, phone calls, and letters about the proposal during the public comment period that ended Friday, and "almost nobody was in favor of it."

"People said that they were struggling with the higher cost of groceries and fuel, taxes have gone up in their localities," Causey told reporters after the meeting. "So I heard loud and clear what the public said."

An executive with the North Carolina Rate Bureau, a state-created entity representing insurance companies, said the industry has to account for inflation -- which affects building material costs -- and the increased frequency and severity of major storms.

"The very real cost of insuring homes in North Carolina has impacted what we all pay for insurance," Chief Operating Officer Jarred Chappell wrote in an email. "Our bureau is responsible for collecting data on claims and that data shows rates need to increase in order to maintain a healthy market in the state."

The average increases sought by the bureau range from just over 4% in parts of the mountains to 99% in the beach areas within Brunswick, Carteret, New Hanover, Onslow, and Pender counties. Proposed increases in the state's largest cities in the Piedmont were roughly 40%.

Congressman Richard Hudson, a Republican who represents NC-District 9, applauded Causey for rejecting the request.

"I'm glad to see that Commissioner Causey listened to my and my fellow colleagues' calls to reject plans to raise homeowner insurance rates for North Carolinians," Hudson said. "This is a big win for hardworking families in the Sandhills and across our state."

Last month, Hudson, Rep. Greg Murphy, M.D. (NC-03), and seven other members of the North Carolina Congressional Delegation sent a letter to Causey urging him to deny these proposed hikes and find a better solution.

Causey said he also empathizes with the homeowners' insurance industry. He said one insurance agent told him that $112 in claims were being issued for every $100 in premiums taken in. But he said the industry must do more to tighten its belt and address insurance fraud.

Causey said he'll preside over an evidentiary hearing starting Oct. 7, and if he finds the proposed rates excessive, he can then issue an order that sets new rates. That order could be appealed. And Chappell noted Tuesday that many rate negotiations over the years have been settled before the hearing. During the last round on homeowners' policies, the bureau sought an overall average increase of 24.5% before a November 2021 settlement resulted in a 7.9% average increase.

"I'm willing to listen if they want to come back with some numbers that are more reasonable to the people because the majority of people can't stand this," Causey said.

The Associated Press contributed to this report.