Lawmakers approve legislation that will provide consumers with more information concerning their insurance rates
The North Carolina House of Representatives have unanimously approved legislation that would provide consumers in the state to receive more time when responding to proposed rate increases on their homeowners insurance policies. The legislation also received votes that will allow it to proceed to the state Senate, where lawmakers will determine whether or not to pass the legislation into law. The legislation will also provide consumers with more information from their insurance providers.
Consent to rate is receiving more attention from lawmakers
Consent to rate is a common practice in North Carolina, and this allows homeowners insurance companies to charge higher premiums for the coverage that they provide. The practice is allowed by the state’s Department of Insurance as long as insurers receive consent from policyholders. If insurers receive consent, they can raise rates higher than the maximum that is allowed by the North Carolina Department of Insurance. One of the problems, however, is that the Department of Insurance has been receiving complaints regarding this process for some time now.
Consumers voice concerns over insurers using a loophole in state law to raise rates
Complaints from consumers involve homeowners insurance companies using a loophole in state law to bypass the rate-change process, raising rates on policies by a significant degree. This is placing homeowners under a great deal of financial stress. State lawmakers have been working to find a way to reduce this stress and lower homeowners insurance rates, but opposition to legislative efforts have slowed the process of addressing high homeowners insurance rates considerably.
Legislation will create a new bonding authority to help cover catastrophic losses
If the legislation is approved by the Senate, it will also create a public bonding authority that will be part of the North Carolina Coastal Property Insurance Pool. This pool will be designed to help cover catastrophic losses, which can be caused by severe natural disasters. North Carolina is somewhat exposed to these disasters because of its proximity to the sea. This exposure is also one of the contributing factors to higher homeowners insurance rates.