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Coastal homeowners vow to fight insurance rate hikes

Posted February 13, 2009
Updated March 9, 2009

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— Coastal homeowners lost a battle to keep their insurance rates from rising more than 25 percent, but some say they'll make sure the war continues, even in the General Assembly.

Coastal homeowners say they're swamped by insurance rate hike Insurance rate hike hurts coast, homeowners say

On May 1, homeowners' insurance rates are scheduled statewide by an average of 4 percent.

In coastal counties, homeowners will absorb additional costs associated with the  Beach Plan, a state insurance program that serves as insurer of last resort for higher-risk coastal properties.

After Feb. 1, when Beach Plan homeowners renew their policy, they will see premium that are 15 to 25 percent higher than those offered by regular insurers, up from 5 to 15 percent above the private-sector rates.

"It's a huge increase – huge. It could take people out of their homes," real-estate agent Missy Baskervill said.

Before he left office, the late state Insurance Commissioner Jim Long agreed to the rate increases to help the state prepare for the cost of a major hurricane. Analysts say the Beach Plan doesn't have enough resources to cover losses from such a storm.

However, some local officials say the rate increases will be a hard blow for the coastal region's economy to absorb.

"We're just doing what anyone would do if their livelihood was threatened," said Tommy Thompson, economic development director for Beaufort County.

About 100 government and community leaders met in New Bern last Tuesday to discuss a new strategy to roll back the increase.

In particular, opponents pointed out the much smaller increases or even rate decreases that inland areas got; rates in Charlotte, for example, dropped by an average of 4 percent.

"Why should our rates be three times, four times, five times higher than Charlotte?" Thompson said.

"Punitive is what it is," said Malcolm Fearing, owner of an insurance company. "That hail deductible in Raleigh might be $50 or $500, but in Dare or the other 18 coastal counties, that could be thousands or tens of thousands of dollars."

The state raised premiums more in areas it considers to be more at risk for hurricane and storm damage, but opponents said state officials haven't presented enough evidence to justify the decision.

Fearing said that storms traveling west to east can do just as much damage in Raleigh as they do in Dare County. He pointed out that hurricanes Hugo, Fran and Floyd devastated inland counties, including Mecklenburg, Wake and Nash.

"Give eastern N.C. a little bit of respect. That's all we're asking," Thompson said. "We're not asking for any gifts and handouts or any subsidies. If the data was examined, you would see we're paying more than our fair share."

The next battlefield in this war against insurance rate increases for coastal homeowners looks to be the General Assembly.

In its final report, a joint legislative committee recommended legislation that supports rate increases while granting some protection to inland and lower-income coastal homeowners.

Meanwhile, people at the New Bern meeting incorporated themselves as a nonprofit – NC20 Inc. – dedicated to fighting rate increases. Its first move, organizers said, will be to lobby for House Bill 26 and Senate Bill 6 – both of which would delay the rate increases.

"We can't give up. We have to try and fight this out," Baskervill said. "We have to hope that our governor and our state Legislature, we have to hope that they're going to hear us."


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  • ncguy Feb 16, 2009

    Sweet sea,
    So let's see- the average cost of 1 week at WB is about 3,000 -4,000

    So you rent your place for 1 week and your insurance is paid for.

    No sympathy here...

  • ignc73 Feb 13, 2009

    sweetsea: Yes, and hurricanes regularly hit the coast. They rarely hit inland. In fact, I'd say that a hurricane hit is much more than three times more likely on the coast than in Raleigh. You only quote a tripling of insurance for coastal residents. That means that they are STILL not paying their fair share. Hurricanes hit very often. People should only live on the coast if they can afford to.

  • sweetsea Feb 13, 2009

    I wish WRAL would list the cost of insurance for a 250,000 house at the beach compared to one in say Wake county. When people see the INCREDIBLE difference they would shut up about beach residents not paying their fair share. They are clueless. It is about $4000 per year for the beach plan and about $1000 for Wake county. And beach residents pay for flood insurance on top of that...another $1500 plus.

  • ignc73 Feb 13, 2009

    Panther: It's greed on the part of the homeowners that don't want to pay their fair share to insure their own homes. That's real greed. The Beach Plan doesn't even have enough to cover a loss. The homeowners want to live where they live AND pay less in insurance. TOUGH! Quit being so greedy and move if you can't afford to live there. I'd rather live elsewhere, but I can't afford to.

  • ignc73 Feb 13, 2009

    The fact that the Beach Plan is underfunded says that people who live by the ocean STILL don't pay enough in insurance. Raise it higher! I'm tired of subsidizing all of the people who live on the coast every summer when the hurricanes inevitable hit. Rise them to the lever they're supposed to be at.

  • Panther Feb 13, 2009

    Animal Lover, Were you here for HUGO? It did more damage in Charlott then on the coast. By raising the insurance on the coast the insurance companies knows that many people vacation at the coast. So they want to squeeze every dollar out of the residence they can. today it's the beach, next week its the Sandhills and the following month it's the mountains. Greed and money.

  • wrx44 Feb 13, 2009

    The increase is now because the beach plan does not have the assets to cover a huge hurricane hit...In otherwords, no increase, no complete coverage for many people...

  • ihateliberals Feb 13, 2009

    Go live at Oak Island and surrounding areas for a period of time - you won't see many 'rich' people. This insurance increase is unfair. This is a case of people relying on assumptions and not fact. Insurance rates should already account for coastal locations - there's been no storm damage in recent years - why the increase NOW?
    I guarantee you that the rental income you pay barely offsets all the other costs of owning and maintaining a home at the beach. Ever wonder why so many properties are for sale when you visit? Also, let's add 30% to your insurance and see how loud you complain.

  • teacher-mom Feb 13, 2009

    that happens everywhere in tourist areas. Look at the ski resorts.

  • teacher-mom Feb 13, 2009

    You are not insuring the land. You are insuring the dwelling and the contents within that dwelling. All people on fixed incomes are hurting. I pay the insurance on my Mom's home, and it is not cheap. We live in Wilson. Insurance is not cheap anywhere. It skyrockets if you file a claim.