Back and forth on North Carolina insurance rate hike continues at Department of Insurance hearing

RALEIGH, N.C. (WTVD) -- The back-and-forth over a proposed insurance rate hike for North Carolina homeowners continued Monday. Attorneys and representatives from the North Carolina Department of Insurance (NCDOI) and the North Carolina Rate Bureau (NCRB) met at an NCDOI building to hold a hearing on the proposed rate increase.

Months ago, the bureau proposed an average rate increase of more than 42% across the state. In some coastal counties, the rate increase proposal was more than 90 percent.

The proposed rate increase hearing comes on the heels of Hurricane Helene's devastating impact on western North Carolina. The proposed hike was submitted months before Helene, and the proposed increases in western North Carolina were substantially lower than coastal communities.

"I don't mind you making money, don't rip me off," Rick McEathron said. "If something happens, we try to take care of it ourselves and not submit it to our insurance company."

Rick and his wife Cindy are in the same boat as many other North Carolinians. They're watching and waiting to see what NCDOI decides.

If the rate increase is approved, it's important to know that what you pay your insurance company may not immediately change the same amount as the rate hike.

"The one thing people need to keep in mind is that if any rate increase is approved, your policy won't automatically go up that much," Jarred Chappell with NCRB said. "It may not impact some people at all."

What each person pays for their insurance depends on many factors. Experts said to wait and see what happens with the rate increase debate and then to contact your insurance agent for specifics about how your plan will change.

"If they raise ours, I don't know what we're going to do," Susan Gilmore said. "We're on a fixed income. Anytime they raise it, it affects everybody across the board."

NCDOI Commissioner Mike Causey has publicly opposed the rate bureau's proposal. In a video released in September, Causey said, "As your Commissioner, I take my consumer protection role seriously. That's why I've said 'no' every time the Rate Bureau has asked for an increase, and I'll continue to fight for lower rates for all North Carolinians."

North Carolina is a rate bureau state; which means the NCDOI does not set insurance rates. Rather, the planning committee and governing committee for the rate bureau meets to discuss rate hikes before submitting their recommendations to the NCDOI. The NCRB represents the more than 100 insurance companies that do business in North Carolina.

"Here in North Carolina today, our homes are being subjected to damage from all kinds of perils, and especially catastrophic storms that are getting worse and worse," NCRB attorney Mickey Spivey said during opening statements Monday.

The last homeowners insurance rate filing was in November 2020.

"The Rate Bureau's filing shows, and the evidence we present during this hearing will show, that homeowners insurance rates here in North Carolina today are severely inadequate," Spivey said. "That is what the data tells us, and that is what the marketplace is telling us. That is why the rate filing before you in this hearing is requesting an increase of 42.2%. That's a big number, but that is what is needed. And we here in North Carolina are not alone."

The hearing is expected to last several weeks. After that, Causey will have 45 days to issue an order on the matter.