Homeowners insurance rate hike leads Commissioner to call hearing

homeowners insurance
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homeowners insuranceThis was a response to NC insurers that have requested considerable premiums increases.

Wayne Goodwin, the commissioner for North Carolina, has ordered a hearing in response to the request that homeowners insurance companies in the state have made requests to their policyholders for an increase in their premiums.

The commissioner feels that the proposed rates are unfairly discriminatory and excessive.

This story was first reported by Insurance News Report on January 23, 2013, but it has since then developed to the point that the commissioner has felt the need to get involved. The homeowners insurance companies, which are represented by the North Carolina Rate Bureau, have made a request to increase their rates by an average of 17.7 percent across the state. This does mean, however, that some policyholders would face considerably higher or somewhat lower hikes.

Goodwin has therefore ordered a homeowners insurance rate hearing to be held in June.

The hearing itself will be open to the public, and will take place on June 3, 2013, at 10 am in Raleigh. The commissioner, himself, will play the role of the hearing officer and will listen to the Rate Bureau and Department of Insurance experts in order to decide if any changes to the homeowners insurance rates are justified and, if so, how large they should be.

The Department of Insurance will be speaking on behalf of the public’s interests. Following a preliminary review of the rate increase filing, and after having examined the comments that the public has submitted, the experts from the department feel that the request made by the homeowners insurance companies are unjustified, based on the data they submitted along with it. This, according to an insurance news release issued by the department.

The news release suggested that some of the concerns that may be raised at the hearing include the following:

• The data used in the rate calculation process is typically two years behind the rate filings.
• The risk factors identified to justify the rate changes are – according to department – not able to justify the size of the rate increases
• A profit methodology used by the Rate Bureau that is not permitted in North Carolina and that was already successfully challenged in the auto insurance sector in 2001.

These represent only a few of the issues that will be raised concerning the homeowners insurance rate increase proposals in the state.

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