North Carolinians will pay more overall for insurance coverage after insurance commissioner Wayne Goodwin signed a settlement agreement with the insurance companies. The agreement allows for a statewide average increase of 13.2 percent for dwelling, fire and extended coverage policies, spread over a three-year period.
The insurance companies, represented by the North Carolina Rate Bureau, requested an overall statewide average increase of 20.5 percent, varying by coverage and territory, in January 2011. The difference between the requested and settled rate increase represents approximately $54.4 million in savings for policyholders over four years.
In Territory 45, comprised of Edgecombe, Franklin, Halifax, Harnett, Hoke, Johnston, Lee, Moore, Nash, Northhampton, Scotland and Wilson counties, premiums will increase only slightly from the current rate to the negotiated rate.
Rates based on a frame dwelling valued at $50,000 with contents at $10,000, the rates will increase from a current $252 to $258 as of March 1, 2015. The Rate Bureau had sought an increase to $292.
On the example dwelling, the cost for fire coverage would actually drop from $120 to $113 for the building premium and from $29 to $26 for the contents premium. Building premiums for extended coverage would increase from $98 to $114 while the contents premium under extended coverage would remain at $5.
Prior to the agreement, the insurance companies were in the process of appealing a 2011 decision by Goodwin to the North Carolina Court of Appeals. That decision ordered a small decrease in dwelling rates.
“It became apparent that if we continued to fight this issue in court, there was too great a risk that dwelling policyholders would receive much larger increases, particularly on the coast. This agreement allows for a smaller total increase spread over three years to lessen the impact on policyholders,” Goodwin said.
“The decision to settle on these rates was not taken lightly,” he added. “In recent years, more and more insurance companies have been dropping or refusing to offer these policies. Genuine concerns about insurance availability were also a factor in arriving at this settlement.”
The last rate increase for dwelling insurance went into effect in 2006.