Don’t be fooled: How to manage your North Carolina insurance policy

Example of a written permission slip for a North Carolina home insurance policy letter.

Example of a written permission slip for a North Carolina home insurance policy letter.

Charlotte Viewers


Home Insurance Hole

If you own your home, look at your bill: Half of all insurance companies in North Carolina have a disclaimer that leaves customers paying hundreds of dollars more per year than the government requires. We’ve researched to bring you the answers.


Half of Charlotte County homeowners are paying more each year — $352 more, on average — than the state’s recommended price for home insurance.

Your insurance company must follow certain rules when setting the price you pay for coverage. North Carolina regulates insurance rates to ensure that homeowners across the state pay the right amount.

But there is a legal way home insurance companies can pay you more than what the state regulators agreed on your information.

It’s called affirmative action voting, and such policies have become more common in North Carolina over the past decade, a recent study shows.

Nationally, nearly four in ten schools pay the state’s limit by using a reading permit, a recent analysis by The Charlotte Observer found. In the Charlotte area, they account for 49.9% of all home insurance.

This is how it is to view your bill and what you need to know about voting approval.

What is a North Carolina permit?

The regulatory approval was designed to give insurance companies flexibility, says David Marlett, executive director of the Brantley Risk and Insurance Center at Appalachian State University.

Insurers in North Carolina calculate your coverage based on the location, type of construction and age of your home.

But, when a property “doesn’t do it,” Marlett said, insurers can ask homeowners to agree to a settlement, meaning they’ll be charged more than they would have been under state law. Without this process, he said, some consumers would not be able to get help.

“You can tell consumers, ‘Look, we can’t insure you at the level the government has approved. However, we will insure you at a level higher than that, but you have to agree,'” he said.

Before 2019, insurers had to send a letter to North Carolina customers detailing the amount and get the policyholder’s signature before applying.

Now, the insurance company discloses it on the website announcing your new policy or renewal letter, and customers show their consent by paying.

Marlett said: “It’s less paper and less signatures.”

How do I know if I have permission to make a payment?

Insurers are legally required to disclose that you agree to adjust the premiums and tell you how much they are charging you for your home insurance policy compared to the state’s limits.

You can find the information disclosed on your policy renewal letter, on the website or on the information page, and in any confirmation of your policy. It is required by law to be printed in bold, all caps and capital letters. It can say something like this:

Pursuant to GS 58-36-30(b1), premiums for North Carolina approved home insurance rates may be provided. (money). Our fees for this coverage are (a lot of money).

If you have paid for the policy, you have indicated that you have agreed to the price increase.

Can I negotiate my insurance for a lower rate?

You can start by calling your insurance company, the NC Homeowners Alliance suggests. They can give you options to change your income or reduce your costs. You can ask your agent why your premium is higher than the regulated price.

If you are not satisfied with their answers, the best option is to buy the products, experts told the Observer.

“Once you get a few quotes, you can really tell if you’re getting a good price,” Marlett said.

The North Carolina Department of Insurance also encourages consumers to try different options when it comes to insurance.

But make sure you’re “comparing apples to apples” when it comes to coverage and cost, said Barry Smith, NC DOI spokesman.

For example, an insurance company may offer you a lower annual premium but a lower premium, meaning your out-of-pocket costs will be higher if your property is damaged. Premiums can also be cheaper if the insurance covers less – for example, less money to rebuild your home, in the event of a total loss.

DOI also recommends checking to see if you qualify for a discount on your policy. You can get discounts on installing alarms, owning a new home or buying home and auto insurance from the same company.

There are other ways to save money, says Michelle O’Connor, president of O’Connor Insurance Associates in Charlotte.

Two tips that encourage customers: pay the lowest price – if you can afford it – and think twice before paying less.

That’s why, from an insurance point of view, filing a claim makes you more likely to be insured. After writing, your insurance company will pay you more in the future. So for a small repair or minor damage, the increase in your annual bill can exceed the cost of paying it yourself, O’Connor said.

“From a consumer perspective, if you have to pay $50,000, it doesn’t matter if you’re paying an extra $200 a year,” he said. “Turning things around is where you can go wrong.”

Articles related to the Charlotte Observer

Hannah Lang covers banking, finance and economics for The Charlotte Observer. His work has appeared in The Wall Street Journal, Triangle Business Journal and Greensboro News & Record. He studied business journalism at the University of North Carolina at Chapel Hill and grew up in the same town as his alma mater.