(The Center Square) – Nationwide is blaming “inflation and market disruptions” for dropping more than 10,000 North Carolina homeowners’ insurance policies, mostly in coastal counties.
“The big takeaway … is back in February they contacted us to let us know about 10,000 policies would be nonrenewed because of the hurricane assessment tool and about half would be referred to the beach plan,” Jason Tyson, spokesman for the North Carolina Department of Insurance, told The Center Square.
His reference is to the North Carolina Insurance Underwriting Association.
The tax exempt association of insurance companies is the state’s market of last resort.
“Consideration was given to climate severity, weather-related losses, and the reinsurance market,” Tyson wrote in an email. “Consequently, underwriting renewal guidelines were refined, and specific actions were necessary for a small percentage of the company’s business.”
In total, 10,525 policies will not be renewed based on a hurricane hazard assessment tool, including 4,744 referred to the association. The total equates to 4.4% of Nationwide’s 237,652 personal policies in North Carolina, or about 1.7% of its 621,705 policies nationwide.
Policies in a total of three dozen counties will be impacted by the nonrenewals that began in July and remain ongoing. Counties with the most residents impacted include Pitt with 1,324, Craven with 938, Wayne with 931, Dare with 838, Lenoir with 783, and Robeson with 644.
Communications with the North Carolina insurance department suggest some nonrenewed policies may be rewritten if wind exposure is ceded to the underwriting association, Tyson said.
“Agents were made aware early on of their policyholders who would be impacted by the impending action and were encouraged to place coverage elsewhere,” Tyson wrote in an email. “Quite a number of insurers writing coverage east of I-95, in the 16 coastal counties, automatically cede the wind coverage to the North Carolina Insurance Underwriting Insurance Company.”
Contacted for response by The Center Square, Nationwide did not answer questions and offered a prepared statement already posted on the company’s website.
Nationwide is “taking the necessary actions that ensure long-term viability and allow us to offer protection at a competitive price to customers across all our business lines who represent many types of needs,” the statement read.
“Inflation and market disruptions impact insurance just like they do any other business. In many instances, this means we are updating our rates,” it continued. “It also means we are being more selective about where we write certain amounts of business and the amount of overall risk we are willing to write.”
Tyson notes “North Carolina has a viable homeowners insurance market, coverage is available and the Beach Plan is robust.”
Tyson said, “If agents have not already contacted their policyholders, policyholders should reach out to their agent to secure replacement coverage.”