Homeowners are receiving consent to rate letters from their insurance providers
Homeowners insurance providers in North Carolina are sending consumers “consent to rate” letters. These letters are informing homeowners that they must agree to pay higher rates for their coverage or risk losing this coverage entirely. For many, this will mean that insurance policies will become significantly more expensive this year. Others may choose to find new homeowners insurance providers and, in some cases, this could save them money on coverage.
State regulators deny rate increases from insurers, but state law allows rates to continue rising for some homeowners
Last month, the state’s Insurance Commissioner ruled against any rate increase in homeowners insurance. This ruling was opposed by many insurance companies, some of whom noted that more properties are being exposed to natural disasters, hence the need for higher rates. The North Carolina Rate Bureau, an organization that represents the state’s insurance companies, had sought to raise homeowners insurance rates by an average of 25.6% throughout the state. Rates would have been increased by as much as 35% in some parts of the state that are exposed to natural disasters.
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State law provides insurance companies with a way to raise rates, as long as consumers agree to pay higher premiums
Insurers still have the ability to raise rates, however, under state law. The law allows them to send policyholders consent to rate notices. Homeowners that consent to paying higher rates will do so, while those that refuse could lose their homeowners insurance coverage. Some homeowners are reporting that their insurance providers are seeking to raise rates by as much as 120% through these consent to rate notices. State lawmakers are considering taking action on the issue, as it may represent a serious financial burden to homeowners.
State officials suggest that those receiving consent to rate letters contact the Department of Insurance
Some state officials are encouraging those receiving rate to consent notices to contact the state’s Department of Insurance. Consumers receiving these notices are also being encouraged to find more consumer-friendly insurance providers. The Department of Insurance can, in certain circumstances, aid in the search for such insurance providers.