For a number of years now, North Carolina Renters Insurance has been difficult to come by. Whether you live on the Outer Banks, in Charlotte, Raleigh, or all the way west in Asheville, you have a very limited amount of choice in the carriers and products that are available to you.
This has to do with the way that renters insurance (and most personal lines insurance) is regulated in North Carolina. Under the current system and the manner in which it is implemented, carriers are largely forbidden from charging prices appropriate for certain types of risk. That has led many insurance companies to stop doing business in the state altogether because it’s simply not sustainable from an actuarial standpoint. But the winds of change are blowing, and it’s possible North Carolina renters insurance consumers might have some additional options in the future. What might be changing, and why? Read on to find out more about this exciting change.
North Carolina Renters Insurance is priced not based on the expected cost of the risk that’s being insured, but on what the state says may be charged for a particular type of policy. Recently, rate increases on homeowners policies were denied altogether or slashed to a level so small as to make them irrelevant to the cost of doing business. That’s been going on for a very long time, and is much of the reason behind carriers leaving the state.
The average cost of a Charlotte, NC Renters Insurance policy is about $125.00 per year. While rate increases sound scary, ten percent would add about twelve dollars to the policy and make it sustainable even as a standalone policy in many instances. That would bring the average cost to about $137.00 annually. Right now the national average cost of renters insurance is $187.00 per year. Since NC has only a negligible downward trend in the cost of claims and significantly higher administrative and compliance costs, that fifty dollar a year difference means that NC policyholders are underpaying for their policies. While it sounds like a good thing, it’s not – it leads to tightened underwriting standards, additional risk to the carrier as a whole, and more difficulty in getting coverage.
While there is a mechanism to charge appropriate rates, it’s dependent upon a piece of paper called a “consent to rate” form that must be signed by the insured and mailed. If that form is lost, late, misdirected, or otherwise not timely, a non-renewal notice goes out. In some cases, without even realizing it, consumers are losing their insurance coverage entirely because of a process mandated by the Insurance Commission. In their current form, they are responsible for approving or denying rates filed by carriers. They are also at least partially responsible for the current regulatory burden on both companies and insureds.
But the winds of change are blowing. Heather Grant, of Wilkes County, expects to be the Republican nominee running against Commissioner Goodwin, and she expects a strong chance of winning. She’s on the record as stating that she wants NC residents to have more security so they can grow and prosper, which bodes well for what she might do as Commissioner. According to her website, she’s a nurse practitioner and a former officer in the Army Nurse Corps. If she wins, will she work to change the current system and make North Carolina Renters Insurance more available to everyone? Will she work to bring carriers back to a state that desperately needs them? If rate controls are relaxed and there is more competition in the market, that means a win for everyone, at all levels of the transaction.
It’s still unknown how she might handle revising the current system, especially as some of it is codified in statute and some in administrative law and practices. But considering her stance on big government and individual liberties, it’s likely that she has an eye on undoing some of the regulatory burden that’s keeping insurance carriers out of the state, as well as making sure that prices are fair for consumers rather than artificially low. A fair price accounts for specific risk factors, whereas an artificially low one is a price control that’s been driving companies away from the state and creating decreased competition.
Effective Coverage works hard to make sure that renters insurance in North Carolina is available to everyone, and to educate residents on their choices and how they can get the best coverage for the best price. If you’re as confused as most people about how property insurance rates are set in NC, feel free to reach out to a renters insurance expert to find out more. Just call (800)892-4308 or click to get covered - whether you need NC renters insurance quotes online or coverage anywhere else!
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