Hearing to decide on proposed homeowners insurance rate spike

Hearing to decide on proposed homeowners insurance rate spike

RALEIGH, NC (AP/WECT) - North Carolina's insurance commissioner is considering a request from companies seeking to increase homeowner's coverage costs by more than 25 percent statewide and even higher in some parts of the Wilmington area.

Insurance Commissioner Wayne Goodwin opened a hearing Monday on the rate increase requested by nearly 100 companies selling homeowners policies in the state. Goodwin's decision is not expected before late this year.

Staffers in the state Insurance Department headed by Goodwin say the proposal is excessive. A lawyer for the North Carolina Rate Bureau representing the companies say they're asking less than the 41 percent increase needed to cover obligations and make a fair profit.

The rate proposal would be a mixed bag for southeastern North Carolina.

Homeowners in western New Hanover, Brunswick and Pender counties would see their rates drop by about two percent. But people living near the beach would see an increase of 35 percent.

Ray Evans, general manager of the Rate Bureau, says hurricanes are the biggest threat to insurers.

"In looking at the last hundred and some years of hurricane experience and trying to project that forward, we believe there will be one sometime, whether it's this year or next year or further down the road, and that's why we believe the rates ought to be higher in the coastal areas," Evan said.

Tyler Newman, senior government affairs director with BASE, a Wilmington-based group that represents homebuilders and realtors, says the proposal would make it harder for people to afford living along the coast,therefore, more difficult for companies to find workers.

"The rates for homeowners insurance are so out of whack in North Carolina," Newman said. "And to increase them again - to have the coastal folks have another increase on top of increases every time since 1992 - is just really unfair."

Insurance companies are also proposing significant increases in area inland counties: 35 percent in Columbus County and nearly 23 percent in Bladen County.

Copyright 2014 WECT. All rights reserved. The Associate Press contributed to this report.