Insurance Commissioner Jim Long signed a settlement agreement with the North Carolina Rate Bureau that raises insurance rates on dwelling fire and extended coverage (fire and EC) by an average 13.6 percent statewide. According to the North Carolina Department of Insurance (NCDOI), the rate hike is a significant decrease from the Bureau’s proposed 42.8 percent average statewide increase, filed with the department in June.
The department said Long’s negotiations could potentially save North Carolinians as much as $34 million in additional premiums when compared to the industry proposed rates.
Fire and EC typically is purchased by homeowners who rent out their properties, or by consumers who do not qualify for a regular homeowners policy. Fire and EC protects the covered structure and contents but does not offer liability or medical coverage.
The North Carolina Rate Bureau (NCRB) is an independent organization that represents the property and casualty insurers in the state. Commissioner Long and his staff with the NCDOI must first review any rate changes for fire and EC that North Carolina insurance companies wish to impose. Long’s legal staff reviewed the NCRB’s most recent filing, dated June 26, 2003, and determined that the Bureau’s requested rate was unnecessary.
“Part of my job is to oversee the review of rate changes, to make sure that the industry’s proposals are reasonable and justified,” Long said. “It took some discussion, but we were able to come to an agreement with the industry that allows them to continue offering this important coverage while preventing consumers from being the targets of unfair rates.”
After more than a month of negotiations, Long signed the rate settlement today. The new rates affect areas of the state differently; some territories may see rate hikes, while others may see significant decreases (see sample chart). The rates go into effect Nov. 15 for new policies or upon renewal for current policies.
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