Commissioner Wayne Goodwin Orders Increased Mitigation Credits for Homeowners Insurance along the Coast

Commissioner Orders Insurance Companies to Pay Much Larger, Pro-Consumer Credits for Carolina Homeowners.

Insurance Commissioner Wayne Goodwin today announced that he has ordered a schedule of mitigation credits for qualifying homeowners insurance policies in North Carolina’s beach and coastal territories. The credits will be effective May 1, 2011 and apply to policies written in the voluntary market and the Beach Plan within the 18 coastal counties. The credits stem from a N.C. Rate Bureau filing required by the 2009 enactment of H.B. 1305 which sought to reform coastal property insurance.

“I’m proud that the Department’s review of the initial filing resulted in larger credits for coastal homeowners than those originally requested,” said Commissioner Goodwin. “Every dollar is important in today’s economic climate, and we wanted to make sure that homeowners will see discounts for the upgrades they have in place to protect their homes.” Homeowners with questions about whether or not their homes qualify for credits should contact their insurance agent and/or company, Goodwin added.

The approved mitigation credits will provide premium discounts for wind and hail coverages on homes with qualifying construction features that help mitigate damage and insurance losses. Different credit levels are available depending on a home’s mitigation qualifications. (Some details are found at the Insurance Journal and the Wilmington Star-News linked here.)

According to the filing language, the largest credits available are for homes that are built in compliance with the Institute for Business and Home Safety (IBHS) Fortified New category. IBHS has three additional levels for which a home can be certified for mitigation credits: gold, silver and bronze. Within each of these three levels, credits will depend upon certain roofing standards. In addition to IBHS standards, there will be credits for homes built or retrofitted with certain mitigation features including engineered window shutters, a hip roof or a combination of both.

The charts linked here and also on the Department's website show sample wind and hail premium credits (in dollars) for qualifying mitigation efforts taken on a home valued at $150,000. The first chart shows what the NCRB filed, the second chart shows what the Department of Insurance ordered, and the third chart shows the percentage increase from the initial credits filed to the final credits ordered.

The N.C. Rate Bureau will be establishing standards for certifying homes in accordance with the mitigation credit schedule over the next several months and communicating with insurance carriers and agents, who will relay the process to their policyholders. To determine what credit level for which a home might qualify, consumers should contact their insurance company and/or agent or review the IBHS website.

"This is yet another example of your Department of Insurance working for you, the homeowner," said Goodwin. "Though no written objections were received by the Department to the initial public filing made by the Rate Bureau, it was important to me as our Insurance Commissioner that the maximum justifiable credits be granted - thus, I ordered a larger credit. This is in line with how I've ordered refunds and rate cuts in other lines of insurance purchased by North Carolinians."

The Insurance Commissioner also stated that it was important to approve the best credits possible now and not allow delays because that would have caused homeowners to go without the credits for another hurricane season.