Raleigh, N.C. — State legislators from coastal counties will meet Thursday to discuss a bill that would put a yearlong stay on changes to homeowners insurance that raised rates along the coast and lowered them for some western counties.

Wake County Superior Court Judge Ronald Stephens turned back a challenge from Dare County and other coastal communities last Wednesday. That allowed the rate changes to take effect May 1 for both private insurers and the Beach Plan, a state program that serves as an insurer of last resort for higher-risk coastal properties.

From Friday, homeowners policies written or renewed in five coastal counties, stretching from Sunset Beach to Morehead City, will jump 29.8 percent. Currituck, Dare, Hyde and Pamilco counties will see policy premiums jump 22 percent.

Meanwhile, homeowners rates in 32 western counties will fall, from an average of 6 percent in Gaston and Union counties to 1.2 percent in most western counties.

Members of the Beach Plan also saw significant increases in insurance costs in February.

The rate changes were negotiated by former Insurance Commissioner Jim Long and the North Carolina Rate Bureau, which represents insurers and had originally sought a doubling of rates.

Some coastal residents say the rate increases are a blow the area's economy can't afford in this recession.

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

Baskervill pointed out that the insurance rates would hit lower-income families, along with the owners of multimillion vacation homes. She argued that hurricanes can do as much damage inland, as far west as Charlotte, as well as along the coast.

Insurance Commissioner Wayne Goodwin has urged the governor and lawmakers not to tinker with Long's rate changes. Without them, he said, financial risks could get too high for insurers and they could leave the state, as happened in Florida.

"I want our legislators and the public to know that if we let certain things happen or if we aren't proactive enough, then all North Carolinians are in jeopardy of having no access to affordable insurance," Goodwin said.

Last September, the Insurance Federation of North Carolina estimated that the Beach Plan can cover up to $2.5 billion in losses – far short of the $75 billion in property damage that the federation says could result from a severe hurricane. Once that $2.5 billion is exhausted, all property insurers in the state have to pitch in to make up the difference.

The Eastern Coastal Caucus begins discussion at 12:30 p.m. Thursday. The bill, sponsored by Rep. Tim Spear, D-District 2, would halt the rate changes until July 2010.

Plaintiffs plan to appeal Stephens' decision to the state Court of Appeals, arguing that that the rates disproportionately raise rates on poorer counties and lowers them on wealthier places, such as the Charlotte metropolitan areas.