State Insurance Commissioner Mike Causey announced Tuesday that he has rejected a North Carolina Rate Bureau’s request to increase homeowner insurance rates by an average of 42%.
Causey said the North Carolina Department of Insurance received more than 25,000 letters, emails and phone calls from residents and others who opposed the increase. A public comment period on the proposed increase closed Feb. 2.
The Rate Bureau’s rate increase ranged from 4% in parts of the state’s mountainous region to 99% in some coastal areas.
“We really heard from the coastal region and I just want to announce today that I said no,” Causey said during a Council of State meeting.
Causey has set a court date for Oct. 7. The commissioner and the Rate Bureau could settle on a smaller increase before the hearing. The Rate Bureau requested an overall average increase of 24.5% in 2020. That filing resulted in a settlement between Causey and the Rate Bureau for an overall average rate increase of 7.9%.
The Rate Bureau, which represents companies that write insurance policies, requested the increase earlier this month, citing a higher cost of doing business due to climate change, which produces more powerful hurricanes and more severe flooding.
Causey said opponents of the proposed rate increase complained that inflation, higher taxes and higher food costs are already making it tougher to make ends meet. Those concerns mirror the concerns citizens shared last month during a public comment session on the rate increase.
Meanwhile, some insurers have complained that they are paying out more in claims than they take in in premiums, Causey said.
“I know it’s tough in the homeowner’s market, but I’d like to see these insurance companies do a better job of tightening their financial and holding down their expenses,” the commissioner said.
At last month’s public comment session, generous CEO salaries at the nation’s large insurers were frequently cited by citizens opposed to the rate increase. State Farm CEO Michael Tipsord took home a reported $24.4 million in 2022. The industry’s top 10 CEOs received $130.6 million in total compensation that year, according to Consumer Federation of America.
Sen. Natasha Marcus, D-Mecklenburg, is a candidate for insurance commissioner. Marcus has called on Causey to hold a public hearing so that insurance companies are required to present evidence under oath to justify a rate hike.
She predicts Causey will agree to a private settlement like he did in 2020.
“The fact that he’s saying a hearing will begin so close to Election Day shows intent to use his usual delay tactics to deny the public the opportunity to hold him accountable,” Marcus said in a statement. “Mark my words, he will delay the public hearing until after November 5, 2024 or avoid it completely by making a private settlement with the insurance companies.”