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January ruling expected for proposed insurance rate hike

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Concerned coastal homeowners could see a ruling for an upcoming hearing on a homeowners insurance rate increase by January 2015, said N.C. Department of Insurance Commissioner Wayne Goodwin.

Goodwin addressed a crowd of approximately 100 people during a Sept. 22 town-hall meeting in Wilmington co-hosted by the Wilmington Regional Association of Realtors and Wilmington-based Business Alliance for a Sound Economy.

Although Goodwin could not discuss specific details of the rate filing, he did share some background information about the proposed increase and encouraged the public to attend the hearing scheduled to begin Oct. 20.

During the hearing, Goodwin will hear evidence from both insurance companies claiming an average 25.3 percent increase for homeowners insurance is warranted, and state representatives claiming the raise is excessive.

The last raise for homeowners insurance rates went into effect in 2013.

The hearing will last three or four weeks. Day-by-day updates on the hearing will be available online at www.ncdoi.com

Goodwin has 45 days after the hearing concludes to release his ruling, meaning a decision can be expected January 2015 unless either party files an appeal.

Goodwin answered other questions about the state’s ratemaking process, including a question from Alicia Devereaux, broker at Intracoastal Realty’s Carolina Beach office. Devereaux asked why North Carolina is one of few coastal states using only one model to determine and assess risk for homeowners insurance. Goodwin said he supports use of multiple models but noted it is a legislative issue, addressed in a 2014 bill that did not become law despite bipartisan support.

Goodwin also responded to an emailed question about whether the N.C. Rate Bureau, a nonprofit organization that represents all insurance companies, still serves the people. He said the structure of the system ensures companies cannot request increases all the time, and when they do, increases can be addressed with one hearing instead of hundreds of hearings.

“We would be like other states, where the insurance companies run the show and the insurance commissioner’s hands are tied,” Goodwin said.

Tyler Newman, BASE senior government affairs director, said he thinks a market-based approach would better serve the people and businesses of North Carolina.

“I think that if you took the barriers down, people would have to provide a service and cost roughly equivalent to one another,” Newman said. “I still think the Rate Bureau is antiquated.”

Newman said a statute guaranteeing a profit for insurance companies is the biggest obstacle to equity among policy holders across the state.

Elected officials in attendance included Reps. Ted Davis, Jr., R-New Hanover, and Rick Catlin, R-New Hanover; Sen. Michael Lee, R-District 9; New Hanover County Commission candidates Dr. Derrick Hickey and Rob Zapple; and Ocean Isle Beach Mayor Debbie Smith.

Catlin said he attended the event because he is dedicated to improving insurance rates in New Hanover County.

“We spend a lot of our own money on beach renourishment, strong protection berms. We have higher building standards and we don’t get insurance rate recognition for that. So this conversation about looking at new models is something I’m passionate about,” Catlin said.

Catlin said he would support legislation requiring additional models to determine risk during the 2015 long session.

The crowd also received an update on national flood insurance reform from Wilmington Realtor Patrice Willetts. Willetts explained how the Homeowner Flood Insurance Affordability Act of 2014 reformed the Biggerts-Waters Act and what pieces of the reform are already enacted.

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