Homeowner policies in Haywood could increase 28 percent

Insurance companies request average rate increase
By Shelby Harrell Staff Writer | Jan 10, 2014

Haywood County residents could see a possible 28.3 percent increase in their homeowners insurance if a requested rate increase is approved. The hike is one opposed locally by at least one insurance business in town.

The North Carolina Rate Bureau, a nongovernment group that represents about 700 carriers in the state, has requested an average rate increase statewide of 25.3 percent for policies that cover homes.

The rate bureau requested the change be effective by Aug. 1, and the increase is now under review by the North Carolina Department of Insurance.

If the department and N.C. Rate Bureau cannot reach a consensus, it will be up to the State Insurance Commissioner Wayne Goodwin to call a hearing and act as a hearing judge in a procedure where industry and state insurance department experts  present for and against the increase. The process could take months.

Gary Lance, president of the LN Davis Insurance Agency in Waynesville, said the rate increase had been proposed because companies are losing money. If insurance companies cannot make money in a particular state, they tend to leave the state, which gives consumers fewer choices in buying insurance coverage, he explained.

“On a national level, companies are losing a lot of money on homeowner insurance,” Lance said. “The losses are finally catching up with reality and so now the companies are really hurting. When I first came into business, people wanted to write property insurance, but now it has reversed, and auto insurance is profitable.”

Lance agrees rates need to be adjusted, but believes 28 percent in Haywood is too high.

Historically, the Department of Insurance and the rate bureau have reached compromises on allowable rate increases which is less than the insurance companies have asked for, Lance said. He predicts the same result will occur this year.

“Usually they can reach a common ground so the situation doesn’t have to go to court unless this particular commissioner wants to go to court,” he said.

The homeowners insurance industry was granted a 7 percent increase last July after negotiating with the state Department of Insurance. The original request was a 17.7 percent increase, according to a spokesperson at the N. C. Department of Insurance. Companies have received several insurance rate increases since 2000.

The public will not be able to comment at a hearing, if one is held, but written public comments will be accepted through Jan. 31.

Lance recently sent in a letter to state officials in Raleigh opposing the rate increase, and encourages everyone else to make their opinion heard.

“I think the more they hear from constituents, the more likely we will receive some help as in rate reduction,” Lance said. “I sent in a letter about consumers already being squeezed on every aspect. Nothing is going down. Everything is going up, and people can’t afford this.”

For local residents who would like to send in a written comment, Lance suggests expressing the difficulties people are facing after continued rate increases. He said to emphasize the 7 percent increase last year.

“So here we are with another rate increase,” Lance said. “Everything keeps going up except people’s income and it’s getting difficult. Tough fixed income. We need to make people in Raleigh aware that this is hard to take continuously over and over again.”

Lance’s position is one that State Insurance Commissioner Wayne Goodwin seems to support.

“I am appalled that the insurance companies would request another increase just six months later,” Goodwin said in a statement. “I believe the insurance companies should withdraw this rate filing immediately. If they do not, the insurance companies should expect a full hearing on this matter; I will not entertain any settlement negotiations. I urge North Carolina homeowners to take advantage of the public comment period.”

Written public comments should be mailed to Attn: Bob Mack, Property & Casualty Division, 1201 Mail Service Center, Raleigh, NC 27699-1201; or emailed to 2014homeowners@ncdoi.gov.