Proposed homeowners rate hike blasted
By William F. West
Friday, December 29, 2017
A spokeswoman for Outer Banks homebuilders and real estate professionals is blasting both a proposed statewide insurance rate hike for homeowners and the way state Department of Insurance officials have informed the public about it.
Willo Kelly, director of government relations for both the Outer Banks Homebuilders Association and the Outer Banks Realtors Association, described the N.C. Rate Bureau’s filing for a 18.7 percent average increase for homeowners this week as “unwarranted and unjustified.” She noted the proposed average increase will be even higher — 25 percent — for homeowners in beach counties like Currituck and Dare.
"I think it's crap," Kelly said Tuesday. "I'm going to just say it like that. There are many things that are not addressed in this filing."
Kelly said data used by the Rate Bureau for the requested rate increase is from 2011-15. She said that while that period does include insurance claims following Hurricane Irene in 2011, storm losses after Irene were minimal.
Kelly, who also serves as president of NC-20, a coalition of 20 coastal counties, also accused the Department of Insurance of a lack of transparency about the Rate Bureau's filing.
The Department of Insurance posted a press release about the filing on its website Nov. 20, a few days after the Rate Bureau's request. But Kelly says the agency didn’t go far enough to inform the public about what the Rate Bureau is requesting.
"Nowhere in that press release or on the DOI's website was a link to the filing, how to find the filing, no charts showing, 'Hey, here's the impact of what you're looking at if this goes through,'" she said.
The N.C. Rate Bureau is the agency that establishes standard rates for insurance in the state. Ray Evans, the Rate Bureau’s manager, couldn’t be reached for comment this week.
However, Rate Bureau Chief Operating Officer Joanna Biliouris told The News & Observer on Nov. 22 that the rising cost of building materials, along with exposure to risk and past insurance claims, require the agency to periodically re-evaluate insurance rates for homeowners.
Kelly disputes the need for the rate hike, however. She noted that the Beach Plan, the windstorm insurance program that provides coverage for coastal residents, collected $1.9 billion in premiums from eastern North Carolina policyholders in 2011-15 but paid out only $235 million in claims.
Kelly said while the proposed average rate hike statewide for homeowners is 18.7 percent, it would have different effects depending on where you live. In Pasquotank, Camden, Perquimans and Chowan counties, for example, the proposed rate hike would be 8.2 percent. In Currituck and Dare, however, it would be 25 percent.
Asked about Kelly’s claim that the Department of Insurance hasn’t communicated well about the proposed rate hike, agency spokesman Barry Smith said he disagreed.
"I'm not sure exactly why she (Kelly) thinks we haven't been transparent," Smith said. "We've been as transparent as we can be. We said, 'Here is what they're asking for.'"
Smith noted the Department of Insurance sent out press releases about the Rate Bureau’s filing for the rate hike to all general-circulation newspapers, radio and television stations. The rate increase is also posted on the Rate Bureau’s website, where there are two links to documents about the proposal, each more than 1,000 pages long.
Smith said the department also held a publicized daylong meeting for public comment at the agency’s offices in Raleigh on Dec. 12. Smith said six persons attended and five of them spoke, all in opposition to the proposed rate increase. He said Kelly and state Sen. Bill Cook, R-Beaufort, were among the speakers. Attempts to reach Cook for comment Wednesday were unsuccessful.
Smith said prior to the public meeting, fewer than 100 persons had sent their comments about the proposal to the Insurance Department. Since the meeting, the agency has received more than 2,000 comments, mostly via email.
Today in fact is the last day to comment on the proposed rate hike. Those wishing to do so may post online comments at 2017HomeInsurance@ncdoi.gov.
Currituck Chamber of Commerce President Josh Bass said the Chamber hasn't had a lot of time to talk about the proposed rate increase "because it cropped up right here at the holidays, which is interesting."
"They kind of caught us off guard at a busy time year for everybody," Bass said.
Bass said the Department of Insurance didn't call his office and didn't reach out to civic organizations in Currituck about the proposed rate hike. He also noted the deadline for the comment period was between Christmas Day and New Year's Day.
While the Department of Insurance may have "dotted every i and crossed every t" on notifying the public about the rate hike, he believes the agency should have gone beyond a “check-the-box” approach if it truly wanted public feedback. He suggested the deadline for online comments could have been pushed to the second week of January.
Under state law, the Department of Insurance can accept the Rate Bureau's request or seek to reach a settlement acceptable to the Rate Bureau. If it accepts the hike, the increase likely would go into effect by July 1. If both sides can’t reach an agreement, however, a hearing will be held.
The Rate Bureau then would have the right to appeal the Department of Insurance's decision to the N.C. Court of Appeals and either side could then appeal to the N.C. Supreme Court.