Insurance Industry Seeks Statewide Premium Increase Post-Hurricane Helene
Amid the aftermath of Hurricane Helene, western North Carolina grapples with power outages and water shortages as a hearing kicks off concerning the insurance sector’s proposal to raise homeowner premiums by over 42% on average across the state. The proceedings opened with a declaration from a key ally of Insurance Commissioner Mike Causey, marking the beginning of what is projected to be a prolonged examination featuring testimonies, substantiation, and legal contentions from advocates representing both the state Insurance Department and the North Carolina Rate Bureau, representing insurance corporations pressing for the surge. Spanning more than 2,000 pages of data submitted last January, the Rate Bureau’s appeal encompasses a spectrum of proposed hikes ranging from slightly above 4% in certain mountain regions to as high as 99% in coastal areas. Notable urban areas such as Raleigh, Charlotte, and Greensboro could see a rise of approximately 40%, with a 20.5% increase requested for the 11 affected western counties, including Asheville’s Buncombe County.
Following public input, Causey declined the request in February, sparking the onset of the current hearing. Previous interactions between the industry and commissioners often resulted in negotiated resolutions before the hearing commenced. However, Causey articulated a different outcome this time, highlighting the inability to reach a compromise in the run-up to the proceeding. A decision on the proposed rates’ validity and potential excessiveness will be rendered within 45 days post-hearing closure, following which an order could be challenged in the state Court of Appeals. Pleading the case on behalf of the Rate Bureau, Attorney Mickey Spivey underscored the surging inflation rates, particularly concerning building materials, coupled with intensifying catastrophic storms asserting the existing premium rates as grossly insufficient. Spivey spotlighted the unprecedented devastation inflicted by Helene in the mountainous regions and Hurricane Florence in 2018, propelling billions of dollars in damages—mostly borne by insurance companies.
While deliberations unfolded, discussions surrounding the repercussions of surging extreme weather events, alongside the ongoing rate escalation debates, took center stage. The Insurance Department’s legal representative, Terence Friedman, contended that the industry is employing actuarial methodologies that sidestep state statutes in rate calculations. Friedman contested the inflated rates advocated by the bureau, advocating for alternative rate recommendations to ensure fairness for the bureau’s members. Concurrently, Spivey highlighted the precarious scenario of insurers potentially halting policy issuances to high-risk homeowners unless premiums, exceeding 250% of the Bureau’s rate, are agreed upon—an outcome facilitated by the “consent to rate” provision within North Carolina law.
Amidst the mounting contentions, the hearing unfolds against the backdrop of the impending early voting period, further punctuated by the forthcoming elections. The absence of Causey—attributing his non-presiding role to his non-legal background—elicited criticisms from Democratic challenger Natasha Marcus, denouncing his administrative stance. While the narration around the post-Hurricane Helene recovery expedited by the insurance industry persists, the impending decision puts into perspective the intersecting realms of policy, public welfare, and regional resilience within North Carolina’s socio-economic landscape.
