Homeowners issue complaints regarding rising insurance rates
Homeowners in North Carolina are voicing their concerns over some insurance companies raising premiums over the state-approved maximum. In many parts of the state, homeowners insurance is becoming more expensive due to a loophole that exists in the state’s laws. This loophole allows insurers to send “Consent to Rate” notifications to homeowners that are about to renew their insurance policies. These notifications inform homeowners that their rates will be going up more than state law would allow for normally.
Consent to Rate becomes a very problematic issue in the state
The matter has been brought to the attention of the state’s Insurance Commissioner, Wayne Goodwin, whom has received more than 700 complaints regarding the issue this year. The Commissioner notes that those receiving Consent to Rate notifications are scared of the implication behind these notices. The state’s insurance regulators are moving to protect consumers on the matter, but the Commissioner is calling for people to continue pressuring insurance companies with questions regarding Consent to Rate notices.
Old state law allows insurers to bypass current rate increase restrictions
Consent to Rate notices are made possible through state law that is several decades old. The law was meant to address certain issues concerning high risk consumers, but insurers are now using this law to bypass the state’s current rate increase restrictions. Commissioner Goodwin suggests that some insurers have threatened to leave the state market if they were unable to make use of Consent to Rate notices.
Homeowners insurance companies could raise rates by 250% without approval if their Consent to Rate forms are signed by policyholders
Notably, many of the Consent to Rate notices being sent to homeowners show that their rates will only rise by $1. Once a Consent to Rate notice is signed by the homeowner, however, the insurance company can raise rates by as much as 250% at any point in the future without receiving any further consent. Homeowners are being encouraged not to ignore any Consent to Rate notice they receive because doing so could cause a lapse in their insurance coverage.