Media-fueled manure storm at center of state homeowner insurance rate debate

It is election time. Lots of wild stuff gets publicly aired at election time. There are attempts to settle scores and capture much-desired seats. But some of the garbage being spewed to the public – by the media and various politicos – ranges from the incompetent, to the dishonest, to the outright corrupt.  Taxpayers are being scared to death by wild stories being spun by politicos-with-agendas and regurgitated by useful, lazy idiots in the drive-by media (who are supposed to be OUR eyes-and-ears in re: said politicos).

I’ve seen headlines in the state’s drive-by media talking about 200 to 400 percent insurance increases. I’ve seen a McClatchy headline bemoaning a 75 year old man having to return to work to pay for insurance commissioner Mike Causey‘s alleged insurance hike. (That little girl running the state Democrats couldn’t have spun it better, or more dishonestly.)  

I’ve seen headlines suggesting it’s all up to Mike Causey whether or not your insurance goes up 42 percent.  The biggest empty-head in our congressional delegation — Greg Murphy — wrote Causey a letter begging him not to raise rates 42 percent on his beach-dwelling constituents.  (Who knows how many times Murphy voted to keep spending the nation into bankruptcy before writing this sad, less-than-accurate letter to the insurance commissioner. As a former member of the NC House, he should know better.)

One of the worst media offenders I’ve seen on this insurance story is WUNC’s Colin Campbell. (Yes, he works for public radio. And YES we do pay his salary.)  You may remember Colin for his fascination  with public restrooms — and trannies in said public restrooms — during the manufactured hysteria post-passage of HB2. 

One of Colin’s worst offenses with this insurance story is neglecting to mention the NC Rate Bureau and the role they play in all this:

[…] Insurance Commissioner Mike Causey will decide whether to allow the proposed increases or negotiate a smaller rate hike. He did not attend the hearing in person, which prompted criticism from some of the speakers. Other department staff members led the hearing and took notes on the comments.

State Sen. Natasha Marcus, a Democrat running for insurance commissioner, said more scrutiny is needed beyond the hearing.

“The public deserves a full public hearing on the proposed rate increase that would include evidence presented by insurance companies under oath about their profits, about their salaries, about the claims made in the different regions of the state,” she said. “That evidence needs to be cross examined by the commissioner of insurance himself … just comments on the record is not enough.”[…]

It’s pretty disingenuous to portray Mike Causey as some kind of puppet for the insurance industry.  He wore a wire for the FBI when someone tried to bribe him.  He waged a lonely fight against a sweetheart deal for Blue Cross that got rammed through the GOP-controlled state legislature.

*It was nice of Campbell to portray Causey as a sniveling coward hiding from the public, eh? Is it any wonder this little media troll makes the big bucks — which, by the way, come right out of our wallets?*

WRAL has been just about as bad as ol’ Colin.  Laura “Slouch” Leslie — she of the anti-church people social media rants — mentions the NCRB, but incorrectly suggests that Causey has “the final say” on this matter.  Not exactly true.  There IS a process to follow.

The North Carolina Rate Bureau (NCRB) has been a fixture in North Carolina business and government since it was created by the NC General Assembly in 1977.  Any insurance company eligible to do business in North Carolina must join it.  The NCRB acts as a unified voice for the insurance industry in the state.  It is not a state agency.  Causey does not supervise it.

I spoke with someone well-versed in the state’s insurance game.  If the NCRB wants a rate increase, it produces what is called a “rate filing.”  The group makes its case to the Department of Insurance on why it feels the need to raise rates.  (The last time this was done, before this year, was 2020.) 

Once the rate filing is done, a public comment period is triggered.  Anyone who wants to speak up about a proposal to raise rates can do so in writing or in person.  THAT is what is happening now.

After the public comment period ends, the insurance commissioner and his team, and the NCRB folks go to their separate corners to prepare for negotiations — sort of a mediation process.

My source compares this mediation — these negotiations – to what happens so often on car lots across the state:

“You walk onto a lot and see a car you like.  There’s a sticker on the window with a figure on it. You know, and the salesman who walks up on you does too, that the number on the sticker will not be the agreed-on sale price. It’s a starting point. There are negotiations on what that final number will be.”

My source tells me that – if neither side can come to an agreement – there is a legally-binding court proceeding that they can both enter into.  The court proceeding is often not seen as a viable, preferable option for the NCRB and its members.  These processes are often very lengthy and very expensive. 

My source tells me the court option often provides enough leverage to force a negotiated agreement.

At the heart of homeowner insurance is the premise of rebuilding one’s home following a disaster.  In the current economic climate,  building materials are seeing dramatic price increases.  It would likely be much more expensive to repair or rebuild your home in 2024 than it would have been in, say, 2022 or 2021. 

My source predicts that, if there is any increase, it will likely be felt most along the hurricane-prone coast. Living out there, you have a tradeoff of a pretty view in exchange for the risk of your house being flattened by the next storm.

My source, a veteran of many years in the insurance game, predicts that the result of this will be nowhere near the 400 percent or 200 percent being bandied around on the Internet.  Nor will it be anywhere near the “average of 42 percent” in the NCRB proposal:

“Causey has been here before. He’s been tough in these situations, as have many of his predecessors. In the past, the rate bureau has gotten a lot less than what they came in asking for. And that will be how it plays out again.  And they know it.”