What’s going on, everybody? I am your Emerald Isle Vacation Home Specialist, Denis Raczkowski, with another article impacting life along the Outer Banks, Emerald Isle, and the Crystal Coast. As always, I appreciate you clicking on this article. Do me a favor and hit the subscribe button; it’s free. Today’s article is about the proposed dramatic increases in homeowners insurance rates in Carteret County. Most of you don’t live in Carteret County, but many do vacation here. So look at this article as an FYI when you discover it will cost more to vacation here in the future—first, a little historical context. The NC Rate Bureau represents companies writing property insurance in North Carolina. Property insurance covers the owner or renter of a house from various damages such as theft, fire, weather damages, and more. In 2019, the Bureau proposed a statewide average increase of 17.4%. Of course, rates varied according to which geographic territory a resident’s home was located. Given that Carteret County experienced two hurricanes quickly, Michael in 2016 and Florence in 2018, it was no surprise that the rates in the geographic territory incorporating Carteret County would experience some of the higher increases. But keep in mind that inland flooding caused most of that property damage, and flood coverage is a separate policy because flooding is NOT covered by a PROPERTY insurance policy. That was one of the arguments MC Insurance Commissioner Mike Causey made in 2019. He ultimately negotiated a statewide average homeowners’ insurance rate increase of 4%, with Carteret County homeowners experiencing some of the highest insurance rate increases in the state back in 2019 at 9.8%. Mr. Causey also negotiated a rate increase cap of 10% rather than the 30% the NC Rate Bureau originally requested. Mr. Causey projected that North Carolina homeowners would save nearly $285 million a year in premium payments compared to what the NC Rate Bureau had requested. Thank you, Mike Causey. Two years later, the Rate Bureau requested an overall average increase of 24.5%. That filing resulted in a settlement between Commissioner Causey and the Rate Bureau for an overall average rate increase of 7.9%. Thank you again, Mr. Causey.
Fast forward to 2024. The NC Rate Bureau proposed a property insurance rate increase of 99.4% in the beach communities of Carteret and Onslow Counties largely based on proximity to coastal waters. Nearby Pamlico, Duplin, and Lenoir Counties could see an increase of over 70%. Local town commissioners noted that insurance rates in the county are already four or five times the rate in most of the rest of the state. Towns like Atlantic Beach have passed resolutions encouraging Insurance Commissioner Causey to reject the requested 99.4% increase completely. Atlantic Beach, Carteret County, and other town Commissioners are urging residents to take action to try to stop or limit the increases, and officials have noted that public opinion can play an important role in the final decision.
With that ‘Call to Action’ in mind, I sent letters to Insurance Commissioner Mike Causey, my NC House representative, Celeste Cairns, and my State Senator Norman Sanderson. In my letter, I asked that the NC Rate Bureau provide DETAILED information regarding premiums and LOSSES experienced by homeowners in every geographic territory in North Carolina to determine if such proposed rate increases are warranted in Carteret County. I urged that the N.C. Department of Insurance, the Rate Bureau, and the N.C. General Assembly work toward a fairer rate structure for homeowners’ insurance in coastal North Carolina. I noted that Carteret County residents haven’t experienced a major weather event since Hurricane Florence in 2018, over FIVE years ago. Most of the property damage resulted from FLOODING, an event NOT COVERED by property insurance. I asked why other BEACH communities in the Outer Banks counties of Currituck, Dare, Hyde, and Pamlico had less than a 35% increase. You can do the same thing and email your comments to NCDOI.2024Homeowners@ncdoi.gov. Hurry, because comments have to be received by Feb. 2.
Now, I get it. Homeowners insurance is becoming more expensive and, in many places, more difficult to find. The culprits are climate change, rising costs to rebuild or make repairs, and a sharp increase in the premiums insurance companies pay RE-insurance companies for their insurance. There’s no sign that the situation is going to get better any time soon. Indeed, major insurance companies have already pulled out of the Florida market because of the increased frequency and intensity of hurricanes, a result of climate change. State Farm and Allstate no longer write new homeowners policies in California, because of more frequent and larger wildfires, also attributed to climate change. Climate change isn’t the only factor. Insurance companies also point to the rising cost of rebuilding homes, up 55% over three years as inflation for building supplies and labor has soared. Re-insurance companies have lost money for the last five years. So to limit their risks, premiums to insurance companies have gone up 40%. Bottom line, the increased frequency of natural disasters is a major factor driving insurers to pull out of some markets and for reinsurers to raise their rates, which affects the premiums everyone pays. Consider Carteret County the canary in the coal mine for North Carolina residents. Thanks for making Emerald Isle Vacation Home Specialist your first read of the day and if you subscribe and drop an email address in the comments below, I’ll send you my e-book, “Live Where You Vacation,” all about the North Carolina Outer Banks, Bogue Banks, Emerald Isle, the Crystal Coast, and Down East. Be safe and have fun, and I will see you next week. Thank you so much.
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