Vacation rentals

A row of vacant vacation rentals lines the waterfront boardwalk at Alfred B. Cooper Memorial Park in Atlantic Beach. (Dylan Ray photo)

CARTERET COUNTY — State officials have moved forward with insurance rate increases that will impact all but one area of Carteret County come Wednesday, July 1.

“We talked to the (N.C.) Rate Bureau and came to the settlement of (a 5.3% wind insurance rate hike),” State Department of Insurance Assistant Director of Public Affairs Barry Smith explained to the News-Times recently.

According to Mr. Smith, the approved wind insurance rate hike does not apply to homes that serve as primary living spaces. Instead, this increase will impact secondary dwelling units, such as vacation homes.

“It would apply to mainly second homes, rental homes,” Mr. Smith said. “It doesn’t apply to apartments (commercial structures) or primary residences.”  

On Jan. 6, N.C. Department of Insurance officials canceled a hearing scheduled for Jan. 13 on a recent request to increase wind and fire insurance rates. The N.C. Rate Bureau, an advocacy group for insurance companies, put forth the request to increase the state’s average wind insurance rate by 24.3% and average fire insurance rate by 4.6%.  

While the DOI did not approve any increases to the state’s average fire insurance rates, it did opt for an average 5.3% rate hike in extended wind coverage.

In a press release, the DOI praised the decision to approve a figure drastically less than the original request of 24.3%.

“The settlement, instead, resulted in a 0% increase for fire coverage and a statewide average 5.3% increase for extended (wind) coverage, an almost 20-percentage point reduction from the proposed increase,” reads the DOI press release.

That increase, according to critics of the change, varies depending on zip code, but largely impacts coastal communities.

While the DOI admits coastal communities are heavily hit relative to inland communities, Mr. Smith said it isn’t intentional.

“I think the issue at the coast is the damages from storms,” Mr. Smith said. “They are more susceptible to wind damage.”

While inland counties like Wake will not experience a rate hike, many counties along the coast are not as lucky. In parts of Carteret County, wind rate hikes are as high as 11% and as low as 0%, according to information provided by the DOI.

“The eastern coastal areas, including Carteret County, it’s an 11% rate change,” Mr. Smith said. “Then there’s western coastal areas in Carteret, it is 0%.”

Only one area in Carteret County is not impacted by any rate hike.

Eastern Carteret County zip codes impacted by the 11% rate hike are 28511, 28516, 28520, 28524, 28528, 28531, 28553, 28557, 28570, 28577, 28579, 28518 and 28589. The rate hike does not impact secondary homes in the westernmost part of the county in the zip code 28582.

“My first reaction is that it’s ridiculous,” Beaufort resident Nelson Owens told the News-Times.

Mr. Owens, who owns a pair of additional homes in Carteret County, described the specificity of the change as odd.

“I’ve never had a wind claim, I’ve been paying insurance on several different properties for the last 10 years. It seems absurd, I’m not sure why they are picking on second homes,” he continued.

Mr. Owens said the change could impact tourism, particularly as it pertains to services like vacation rentals.

“If everybody’s insurance goes up, we’re going to have to pass it on to our customers,” he said. “It’s kind of an inflationary sort of thing.”   

While many believe hurricanes Dorian and Florence played a role in the decision, Mr. Smith said that isn’t the case.

“Hurricane Florence and Hurricane Dorian happened after (the most recent data collected) for the request,” Mr. Smith said. “This request took into account data up until 2017. Florence was in 2018 and Dorian was in 2019, so that was not included in this.”

DOI officials did consider Hurricane Matthew and inclement weather that immediately predated 2018, though Mr. Smith said the dataset’s starting year is unclear.

Contact Dean-Paul Stephens at 252-726-7081, ext. 232; email; or follow on Twitter @DeanPEStephens.

(3) comments

David Collins

Just the cost of doing business in harms way . You chose to build so get over it .

the secret life of man

Rents are going up.Property managment fees are going up.Flood insurance going up.Landlords you're going down for investing.Residents hold to your money,you're next in a much larger scheme.

the secret life of man

Fools build in harm's way.

Welcome to the discussion.

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