North Carolina property owners got some good news this past week as Insurance Commissioner Wayne Goodwin announced that rates on some properties would drop by an average of 7.3%. The Commissioner also rejected a rate increase proposal from the North Carolina Rate Bureau, which would have raised rates on dwelling extended coverage by 36%. The lower rates will take effect on January 12, 2012, and will affect some 400,000 policies throughout the state. The lower rates will not apply to a homeowner’s primary residence, however, as the rates are meant to benefit landlords and those with secondary homes.
The Rate Bureau claims that the rates they recommended were so high because the rates associated with rental properties have not been changed since the early 1990’s. The Bureau had opted to not file annual filings as to avoid issues with the economy and potential rejections. The Insurance Commissioners claims that the rates would have been grossly excessive and unfair to consumers, especially in the current economic climate.
Kathleen Riely, governmental affairs director for the Wilmington Regional Association of Realtors, claims that the Commissioner’s bold move is due to the upcoming election year. Goodwin announced that he would be running for re-election in October. Riely notes that the Commissioner may be looking to gain favor with voters; many of whom happen to be property owners. Regardless, those living in rented properties should benefit from the new changes, many arguing that if the higher rates had been approved it would’ve increased rents as well.