North Carolina homeowners are once again facing the possibility of insurance increases, and as has been the case for the past two decades, this proposed rate increase impacting all property owners statewide lacked adequate explanation or time to respond.
In mid-November N.C. Insurance Commissioner Mike Causey sent out a two-page press release announcing that the N.C. Rate Bureau, the representative of the accredited companies selling insurance in the state, is requesting approval for a 24.5% increase in insurance rates statewide for homes, condominiums and apartments. The request also includes wind insurance. The release went on to announce that public comments on the request would be accepted through Dec. 11 and that a virtual public meeting would be conducted 10 a.m. to 3 p.m. that same day which was this past Thursday.
The public notification of this proposal was extremely short on both time allotted for public comment, one month, and equally short on information about the reason for the increase.
The only explanation provided in Commissioner Causey’s release is “one of the drivers behind this requested increase is that North Carolina has experienced increased wind and hail losses stemming from damaging storms.” There is no mention of what storms are the cause nor any indication as to the losses suffered. It also fails to mention that there is an extreme disparity of rate changes with the coastal region experiencing the highest rate increases in all categories.
Anyone interested in the details of the rate increase would need to know to go to the Rate Bureau’s website to read and attempt to comprehend the two part, two thousand page filing. The North Carolina Department of Insurance (NCDOI) has few details about the filing and only provides information for making comment or participating in the virtual meeting.
Home, condominium and apartment insurance coverage is a needed and much appreciated product to protect the owners from catastrophic property losses. And, if a bank mortgage is involved the lending institutions insist that the structures are adequately insured to protect the lender from catastrophic losses outside the control of the property owner. In essence, home, condo and renter’s insurance are a must.
Because of the necessity and complexity of insurance, the state has established the Department of Insurance to provide oversight to assure consumers of the integrity and adequacy of the coverage and that the providers are operating competitively. But the absence of disclosure in recent rate insurance rate filings and the subsequent lack of time to digest the facts and respond to the requests brings into question the NCDOI procedures.
Utility companies licensed to provide electricity and gas services in the state, like the insurance industry, must seek approval for all rate increases or adjustments in service. In those cases, the utility company requesting a rate or service change must present documentation for the changes to the state’s Utilities Commission. The commission then conducts public witness hearings in several towns affected by the rate or service proposals. Following these meetings the commission then conducts an expert witness hearing and from both the public forums and more comprehensive hearing, the commission’s staff makes a report for the Utilities Commission’s final decision.
Considering the complexities of the insurance rate proposal (2000 plus pages of documentation that divides the state into specific regions) and the expansive requirement of insurance for property ownership, it stands to reason that the NCDOI should do more to inform and educate the public.
Simply announcing that a rate increase has been proposed with little, very little, explanation and then to provide only one month to understand and research the facts provided is unfair to the public. It is worth noting that this proposal, like four other previous proposals, comes during the holiday season when the general population is focused on the Christmas season. It’s particularly onerous this year as the state deals with the impacts of the Covid-19 pandemic.
There are two solutions that demand immediate action. First, Commissioner Causey should delay any action on the rate proposal until at least the middle of next year, by which time it is anticipated the state will begin recovering from the pandemic. Considering the current health and economic concerns resulting from the pandemic there is little time to focus on the impacts of this proposed rate increase.
Secondly, local and state officials should demand improved disclosure and public comment procedures for all future insurance rate and service changes. A simple two-page press release isn’t adequate. Because the NCDOI has allowed the insurance industry to divide the state into regions and sub-regions, each carrying a different insurance formula, the legislature should require Commissioner Causey to conduct regional meetings across the state providing understandable details about the impacts of the proposed rate structure and to allow for a longer period than just 30 days for public comment
North Carolina’s economy is taking a serious hit because of the Governor Cooper’s mandates and the public fears resulting from the pandemic. Any additional economic disruptions without adequate explanation and notice, particularly at this time, are totally unacceptable.