The commissioner in the state has openly recognized that there is an issue which must be overcome.
Though the majority of people would say that they’re already paying high premiums for their homeowners insurance coverage, those in North Carolina have more to complain about than most, as the majority of property owners have seen their bills suddenly spike by a third to nearly three quarters of what it previously had been.
Many people have received letters saying that if they don’t agree to these increases, they will lose their coverage.
These letters from homeowners insurance firms have been mailed out to hundreds of thousands of property owners throughout North Carolina. The commissioner in the state, Wayne Goodwin has now called this a problem. This, problem, however, is perfectly in legal in the state. These “consent to rate” letters are a permissible practice for insurers in the state, and the law in N.C. allows these companies to charge up to 250 percent more than the maximum rate that has been set by Commissioner Goodwin.
Goodwin explained that the problem with these homeowners insurance rate increases is in the method that was used.
He explained that “Things that are done to force – directly or indirectly – the public to bypass that cap is very frustrating, very much a problem.” He stated that the reason that the law allowing the “consent to rate” letters was created a number of decades ago was to give insurers a way to manage very high risk customers in rare circumstances.
Goodwin also said that “The reason that insurance companies are using this as their go-to more so than the exception is the insurance companies believe – they allege – they’re not allowed to charge enough, and I’m sure that viewers probably have an opinion on that.”
The North Carolina Rate Bureau head, Ray Evans, stated that if homeowners insurance companies do not obtain adequate premiums in order to cover the risk, then they will no longer have any reason to continue doing business in the state. The bureau works on behalf of insurers in order to make rate adjustments from the commissioner.