By David Purtell

david.purtell@salisburypost.com

Homeowners in Rowan and Cabarrus counties will see their insurance rates go up this summer.

Insurance companies will be allowed to increase rates on policy renewals for homeowner insurance by an average of 19 percent in the two counties starting June 1. The “average” means the overall rate increase for a company can be as high as 19 percent for all of its policies combined. Some policies could have rate increases higher than 19 percent while others could be lower.

Rowan and Cabarrus will see the second highest increase in the state — Avery and Mitchell Counties will see a 21.4 percent increase. Meanwhile, other counties across the state will see decreases in their rates — as much as 21 percent in some places.

Most of the state’s western counties will see an increase in rates while eastern and coastal counties will see a decrease.

The change comes on the order of state Insurance Commissioner Wayne Goodwin, an elected official who in January called for an average decrease across the state of 0.3 percent for homeowner insurance policies.

Independent insurance agents John Drye and Jay Whittington, with Central Carolina Insurance Agency, said homeowner rates need to increase across the state, but said they don’t understand why Rowan will see a big jump while nearby counties see almost no change.

Iredell and Stanly counties will see a 0.2 percent increase. Davidson County is set to see a 19 percent jump while Davie County will get a 0.1 percent increase. Mecklenburg County will see a small, 0.2 percent, decrease.

When compared to other states, North Carolina does have some of the lowest homeowner insurance rates in the country, Drye said.

Over the last 25 years, homeowner rates have not gone up very much in this state, Whittington said.

“All these companies have loss ratios. … They’ve been losing so much money in the last few years from events like the wind and hail.” he said.

Drye and Whittington said that “exposure,” the value of items in a home that can be claimed, has gone way up in recent years. Think electronics, huge TVs, computers and cell phones, they said.

People have more in their homes now then they did 10 years ago, Whittington said, adding the cost of replacing things has gone up too. A typical claim for water damage was a few thousand dollars 10 years ago, he said. Today, it’s not unusual to see water damage claims for $25,000.

But what makes them scratch their heads is the difference in rate changes from county to county.

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In North Carolina, insurance companies are represented by the N.C. Rate Bureau. Every so often, the bureau will file a request with the insurance commissioner to change homeowner rates. This happened early in 2014, when the bureau was seeking an average statewide increase of 24 percent — including a 35 percent increase for Rowan and Cabarrus.

The bureau breaks the state into groups of counties called territories. By analyzing the amount of past “experience” — weather events, house fires, etc., that lead to insurance claims in each territory — the bureau calculates how much rates need to be for insurance companies to cover their potential losses.

Tim Lucas, who oversees rate filing and policy form filings for the the Rate Bureau, said rates in North Carolina are low. Based on the experience insurance companies are seeing across the state, the current rates are inadequate, he said.

For a long time, Rowan and Cabarrus were in a territory made up of most of the counties in the western part of the state, but the counties now share a much smaller territory with Randolph and Davidson counties.

Last year, Goodwin balked at the bureau’s request and scheduled a very rare public hearing on the rate issue, which began last August. Representatives from the Rate Bureau and experts from the state Department of Insurance, who argued rates should decrease statewide, made their case to Goodwin, who had to take all the information and come to his own conclusions.

This was the most thorough inspection of homeowner insurance rates in 20 years, Kerry Hall, spokeswoman for the Insurance Commission, said.

Hall provided a chart showing that Rowan and Cabarrus currently rank near the bottom statewide when it comes to the cost of home insurance.

For a home valued at $150,000, a typical policy costs $517 a year in Rowan. That’s compared with $546 for the same policy in Mecklenburg and Union counties. Neighboring Iredell and Stanly counties are also at $517. For a home in one of the coastal counties, which face the threat of hurricanes, the same policy can cost more than $2,400 per year.

With the rate increase, the same policy will now cost $654 in Rowan and Cabarrus.

Hall said rates are going down in the coastal areas because there haven’t been any significant storms that have led to a high volume of claims in recent years.

Hall didn’t give a specific reason for why the rates are going up dramatically in Rowan and Cabarrus. She said the changes are based on the data the insurance companies provide, which is available to the public.

Whittington and Drye wondered if maybe the explanation is just plain politics. But they did say insurance companies have experienced loss in the area in recent years from events such as hail and wind storms.

There are ways to save money on insurance, they said. It has become more important to package insurance policies, such as auto and home, with the same company to save money, Drye said.

They also said people need to stay on top of their credit score because insurance companies are checking it and will raise rates if the score falls. A good credit score is vital in order to save money on home insurance, they said.

Contact Reporter David Puretll at 704-797-4264.