State Insurance Commissioner opts to reject rate increase proposals from insurance companies
Insurance rates for homeowners in North Carolina may not be rising due to action taken by the state’s Insurance Commissioner, Wayne Goodwin. Homeowners insurance companies had sought to raise rates by an average of 35% throughout the state. Last week, however, Commissioner Goodwin decided to strike down rate increase proposals from insurers. This move means that insurance rates will throughout the state are not expected to increase at all on January 1, 2015.
Average cost of insurance coverage for homeowners will decrease next year
On average, homeowners insurance rates throughout the state are expected to fall by an average of 0.3%, while renters insurance will climb 11.2%. Those that own condos will see their rates increase as well, by an average of 8.1%, effective January 1, 2015. Insurers had sought to increase rates in the eastern parts of the state, where properties are more exposed to natural disasters, such as flooding and wind damage. Coastal properties tend to have more expensive coverage, but many will see insurance rates decrease next year.
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Consumer advocacy groups believe action taken by state Insurance Commissioner is a victory for coastal communities
Consumer advocacy groups are declaring this to be a victory for homeowners and business in coastal regions. Homeowners in these regions have seen their insurance rates grow significantly over the past few years. These rates have grown as insurance companies look for ways to recover from losses they see due to natural disasters.
Some insurers may decide not to consent to rate orders coming from the state
Some homeowners may still see their rates increase if insurance companies choose not to comply with the Commissioner’s ruling. Insurers can require policyholders to pay more for their coverage if these insurers do not consent to the state’s rate orders. Some insurers may claim that providing coverage to coastal properties is too much of a financial risk, which would justify higher rates. Whether or not insurers will chose not to consent with rate orders is still uncertain. State lawmakers are expected to revisit the issue of the high cost of homeowners insurance in the state next year.