What does my North Carolina Consent to Rate form mean for my home insurance?

You’re not happy and I don’t blame you!

If you searched for information about a North Carolina Consent to Rate form that you got in the mail from your insurance company you probably aren’t in the best of moods right now; and you shouldn’t be.  Now there are certain circumstances where I believe this form is justified, but it’s not under normal circumstances.

Hamburgers and insurance

Think about this, you own a restaurant and the most you can ever charge for a hamburger is $30.00, which is a really expensive hamburger, because that’s what the government entity that regulates restaurants says you can charge.  You think to yourself this doesn’t seem fair because not all hamburgers are created equal.  Which means you’ll agree that there’s a difference between hamburgers you get a fast food place and a fine dining restaurant.

At the fast food place you’ll probably receive a Select + cut of meat for your hamburger, and at the fine dining restaurant you’ll probably receive Kobe beef.  For the fast food place it may cost them $2.00 per pound, but at the fine dining restaurant it may cost them $40.00 per pound.

If the government entity that regulates restaurants only allows them to charge $30.00 for a hamburger, then math tells you that the restaurant is going to lose out BIG by selling Kobe beef hamburgers and they’ll stop selling them.  This doesn’t seem very fair to the restaurants that want to provide their clientele with the best hamburger possible.

How does this relate to insurance you may ask?  Really it doesn’t relate, but it does illustrate what insurance companies face in North Carolina to sell home insurance to people like you and me.

North Carolina Rate Bureau and Department of Insurance

In North Carolina we have an organization called the North Carolina Rate Bureau (NCRB) that helps to provide services and programs, and make recommendations on behalf of insurance companies in North Carolina.  The Department of Insurance (DOI) is the government entity that regulates the insurance industry, provides licensing for agents like me, and a host of other items.

These two organizations work together to provide the rate, which means how much the insurance company can charge you for your home insurance and other insurance products.

Why did I get a Consent to Rate form?

As I mentioned above the NCRB and DOI in conjunction, set how much an insurance company can charge.  Often times how much an insurance company is allowed to charge you isn’t enough based on their data.

Maybe you recently filed a home claim because a pipe burst in your home?  Maybe you only have home insurance with this company instead of bundling it with your auto insurance?  (FYI, it’s almost always to your benefit to bundle your auto and home insurance with the same insurance agent AND insurance company.)   Maybe you recently declared bankruptcy?

There are a number of reasons why you received the form and you should call your insurance agent or insurance company to see why before you shop your insurance.  Your current insurance agent or insurance company may be able to help you out with why you received the form or a solution to remedy the issue.

What does the North Carolina Consent to Rate form mean?

Right now you’ve read over 500 words and you are beginning to wonder if I’ll ever answer the question that you originally asked.

A North Carolina Consent to Rate form means that your insurance company needs to charge you more money than what they are allowed by the NCRB to do without your authorized consent.  By signing the form you allow the insurance company to charge you up to 250% more than what the rate is set at.

For example, the NCRB premium is $1,000.  Your insurance company can now legally raise your premium to $2,500.

Why you should sign the North Carolina Consent to Rate form?

I would strongly encourage you to sign the North Carolina Consent to Rate form even if you are going to shop your insurance.  The reason being is that you may not be able to find a better policy or better price than what you currently have.  If you don’t sign the form, then the insurance company won’t renew your policy.

Make sure you sign the form so that you have home insurance!

What happens after I sign the North Carolina Consent to Rate form?

Once you sign the form, then your insurance company will renew your home insurance and you’ll have insurance for one more year.  Now once you sign the form the insurance company does not need your written authorization again in the future.

Unfortunately there are some insurance companies that are currently sending out these North Carolina Consent to Rate forms for you to sign when their rate is only $1 more than the NCRB premium.  To me this isn’t the right thing to do and I’ve had a number of new clients switch to our agency because of this.

What should I do so that I don’t have a North Carolina Consent to Rate policy?

You can bundle your auto insurance and home insurance with an independent insurance agent like us.

You can increase your deductible.

You can make sure that your home isn’t overinsured.

You can install a monitored alarm to get a discount.

You can get life insurance with the same insurance company.

There are a number of things you can do, but it starts with working with an independent insurance agent.

That’s a wrap folks!

I want to thank you for stopping by today and taking a few minutes out of your busy schedule to learn more about the North Carolina Consent to Rate form.

If you have any questions about the North Carolina Consent to Rate form that I didn’t answer above please feel free to call me at 919-463-5300 or email me josh@lipstoneinsurance.com.

You do have options and it starts with an independent insurance agency like us.

Joshua Lipstone

Hey I'm Josh! I'm the Vice President of Lipstone Insurance Group. I'm here to help any way I can, so don't be shy. Drop me a line!

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