Legislators from coastal communities are hoping to make the rate system different and more transparent.
Lawmakers that are representing coastal North Carolina counties where residents are feeling high frustrations about the skyrocketing cost of homeowners insurance, have now introduced a number of bills that would change the way that the state regulates the rates that are charged as well as to add transparency to the system as a whole.
One of the two primary measures has already been receiving bipartisan support as there are sponsors from both parties.
Both Republicans and Democrats have been listed as the sponsors of the companion bills that have been filed regarding the homeowners insurance in North Carolina. This is the case in their filings in both the House and the Senate. One of the companion bill provisions would specifically identify what the N.C. Rate Bureau must include within its computer model for the estimation of losses from a major catastrophe, such as a hurricane, in the future.
The Rate Bureau would also be required to use two computer models for potential homeowners insurance losses from hurricanes.
The North Carolina Rate Bureau represents the homeowners insurance industry when rate increases are being sought. The new bills would change the way that the bureau makes its requests for the increases and would necessitate that it provides greater detail into the justification for the changes.
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Hurricanes have left catastrophic damage in the state in the past – particularly along the coast lines – and it is predicted that this will continue into the future. This can mean the potential for continued home insurance losses of significant proportions. The outcome of this prediction is that the rates for property owners along the coasts have been spiking ever upward.
However, critics to these homeowners insurance rate increases have said that the increases have been based on inaccurate computer models. Therefore, they have said that a bill that generates data from a minimum of two different models will be important because, according to Rep. Paul Tine (Kitty Hawk-D) “models have a lot of supposition in them”. Tine is among the co-sponsors for the bill that would make these changes.