If you live in NC , then you have many things to be happy about. One is that your NC homeowners policy rates are among the lowest of any state in this part of the country. And relatively speaking, they should remain that way. But brace yourself, homeowners insurance rates in North Carolina, like most other states in the South and Southeast are poised to increase rather dramatically. And to go along with these rate increases, the availability of homeowners insurance in NC is going down.
In most cases, insurance companies who sell auto insurance and home insurance in North Carolina, also do the same business in many other states all across the country. So bad loss years in one state for an insurance company can be balanced out by profits made in other states for that year In 2011 though, this formula did not work out well for most insurance companies as 2011 was a year of storms and weather related losses all across the country. Now, insurance numbers are notoriously slow in being published (what do you think that says about the speed of their claims service?) so we don’t have all the numbers in at this time. Still, with my ear to the ground and hearing what the company people are saying, it is an easy call to say that insurance rates for homes in North Carolina will almost certainly be increasing in 2012 for almost everyone. And for those with more risky situations or poor loss history, these changes might even mean it is hard for them to buy insurance for their home at any price.
The numbers aren’t all in yet, but the insurance industry has suffered 4 straight years of record losses in the area of home insurance. The losses have to be recovered somewhere and you know the most direct way to do so will be to increase the rates that you pay for your home insurance. Take a look at some numbers that indicate the trends that the insurance industry has been fighting against for the past 4 years. The average cost for a homeowners policy in the United States in 2008 was $791. In 2009 that number climbed to $799 and in 2010 it went to $807. The 2011 number is estimated jump to about $840. For 2012 we can expect a national increase of about 5%. But that doesn’t tell the whole story for those of us who own homes in NC. Here we had heavy hail losses last Spring, and that combined with the underfunded beach plan and the risks of beach plan assessments on NC insurance companies, means that you can probably expect rate increases of more than 5% as well as an increasingly tighter market for homeowners insurance in our lovely state.
It is already game on for some insurance companies who are starting to place limits on the number of homes they will insure in 2012. Many insurance companies are now requiring that you buy your auto insurance from them or they will not insure your home. Others have even stopped writing new homeowners insurance policies. There are a few companies that are actively reducing the number of homeowners policies that they sell in NC by non-renewing policies in their book of business.
So what does this mean for you and what should you do to protect yourself and your home from this troubled insurance environment? First of all, I would suggest that you use an independent agent to help you procure your home and your auto insurance policies. If you are buying your insurance from a direct writing company such as a State Farm, Nationwide, Allstate or Geico, remember that if your insurance company takes drastic action towards NC and home insurance, then your agent will probably not have an alternative solution for you. This could leave you scrambling for coverage in tight marketplace. Also, you should always keep your home and auto insurance insured with the same insurance company. This will save you money of course but it will make you a more important client to that insurance company. If your insurance company starts taking action to reduce their homeowners exposure in NC, then your account is less likely to be affected.
At Clinard Insurance Group in Winston Salem, NC, we insure thousands of homes and thousands of cars all across North Carolina and South Carolina. We are an independent agent and we have many insurance companies that still have a good appetite to write home insurance in NC. If you would like the personal help and attention of one of our trusted agents, please call us, toll free at 877-687-7557 or visit us on the web at www.ClinardInsurance.com. We will take as much time as you want and need to be sure that you are buying exactly the protection that you want for the lowest possible cost to you.