North Carolina homeowners insurance becomes target of regulatory action
Insurance companies in North Carolina are being called upon to justify a proposed increase in insurance rates. According to the state’s Department of Insurance, many homeowners insurance providers have proposed an average rate increase of 18% throughout the state. The proposition has caused some turmoil amongst consumers who consider such an increase to be unfair. Insurance Commissioner Wayne Goodwin is now calling upon North Carolina homeowners insurance companies to provide more information on why they believe the rate hikes to be necessary.
Insurers called to justify significant rate increase proposals
The last time North Carolina homeowners insurance rates were raised in North Carolina was in 2008, when insurers sought an average 20% increase. The North Carolina Rate Bureau approved only a 4% increase to rates. Citing growing risks concerning natural disasters and other problems, insurers are now pushing to get approval for the rates they want. Commissioner Goodwin considers the new rates proposed by insurers to be excessive and has called several companies to debate the matter publically on June 3, 2013, two days after insurers had wanted their new rates to go active.
Regulatory move may be political stunt
Some consumers are expressing their concerns regarding the sudden, uncharacteristic announcement from Commissioner Goodwin. Two weeks from now, an election will determine whether the Commissioner gets to keep his position for another four-year term. Thus, some believe that the move is nothing more than a political stunt designed to win the favor of voters throughout the state. Whether such a move will win the Commissioner re-election is up for debate.
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Higher rates may be dismissed by North Carolina homeowners insurance regulators
For now, homeowners insurance rates in North Carolina will remain the same. Whether Commissioner Goodwin remains in office or not, insurers are still likely to be called to justify their rate increase proposals next year. If adequate justification cannot be found, state regulators may choose to dismiss the rate increase proposals entirely, or work with insurers to find an alternative.