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Coastal lawmakers discuss homeowners insurance rate hikes

Posted May 7, 2009

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— 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.

Lawmakers push against insurance rate hikes for coastal homeowners Lawmakers discuss rate hikes for coastal homeowners

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.

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

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.

Commissioner: Bills could make homeowners insurance unaffordable Commissioner: Changes needed for affordable home insurance

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.


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  • beachman68 May 7, 2009

    I dont live at the beach, But i do go down there as much as i can.We have storms here just tuesday we had homes damaged here.And we had mud slides in our mountains.So why dont we have a 30% increase over the state.that would help more.What is good for one is good for all.Alot of the people down there where are still are in the service.So why dad or mom is over seas fighting for our freedom lets go up on ther taxes all we can.People we have our part of bad weather here in raleigh!If they do this to them, we might be next,or should i say we are next!!

  • doubletrouble May 7, 2009

    I imagine if you can afford beach front property, and afford to place even your first or second house there...you can also afford the cost of the insurance/taxes. The rest of the folks, who live away from the coast, shouldn't have to share your burden-or support your lifestyle.

  • oceanchild71 May 7, 2009

    And, BTW, most of those Huge McMansions are owned by out-of-state owners as either investment properties or second homes. The more modest homes that you see in these areas are the ones that belong to the people who serve the mindless, rude masses their ice cream cones and fried shrimp baskets or who pick up the broken items in the store after a bunch of misbehaving kids whose parents are too busy talking on the cell phone (or worse, have those stupid Bluetooth things attached to their heads)have wrecked the store.

    I hope all you people who apparently despise anyone who lives near the beach just stay away from the coastal areas. Also, please donate your portion of the tax dollars that are generated by the hundreds of thousands of people who descend upon our beaches every weekend of the summer.

    Funny how legislators and the mindless masses forget about all the good things those counties do for the state.

  • oceanchild71 May 7, 2009

    How many times every YEAR does Crabtree Creek flood and cause damage to Crabree Valley Mall and the apartments in that area? How many times does Fargo, ND flood every year during the spring thaws? How many mountain streams go out of their banks and wash away bridges and homes? Notice all of these incidents take place inland! I didn't see the same people who are spewing such vitrol against people who live near the coast saying the same things against the people who live near these very much inland areas that suffer damage all the time.

    Your insurance rates should be dependent upon how much you are insuring and what are the true factors involved. I want to know where all the money went that the insurance companies collected for YEARS during the 1970's & 1980's when there were relatively few storms?

    Why won't the insurance companies answer those questions?

  • JustOneGodLessThanU May 7, 2009

    Basically... Should homeowner insurance be subsidized (artificially lowered) for beach home owners?

    IMO, No!

    Soo.... How many of these rich homeowners consider themselves "conservatives" and SAY they're against gov't handouts...but would gladly accept this insurance welfare?

  • gr May 7, 2009

    For every "rich" person living on/near the coast - think about this - there is someone who cleans their home, picks up their trash, cleans the street, works at the grocery story or bank, or fish, etc.....these everyday people are not millionaires but someone has to live in the area to support the economy. The rate hikes will really hurt those people. These everyday people dont drive in for many miles to do this type of work.

  • time4real May 7, 2009

    " Please don't lump me in with the "beachhouse" owners"

    then move!

  • IrrationalThoughts May 7, 2009

    I don't live "on the beach" or "at the beach" but a 7 mile drive from the closest place to park if I want to "go to the beach" (if I can find a parking place). However, my homeowners insurance will rise just because I happen to live in this county. I don't live here because of the beach, but because of my job, and my wages are certainly no higher because I live in a coastal county. I am 100% against subsidizing insurance for someone's oceanfront/oceanview home. Please don't lump me in with the "beachhouse" owners, because I sure don't have one. I already have to pay for a homeowners policy PLUS the special State insurance policy which costs more than my homeowners just for living in a county which borders the ocean.

  • time4real May 7, 2009

    if you are well off enough to own a trailer, much less a home, at the beach, it's YOUR problem. pay the increase and go jump if you think I'm going to pay an increase for YOUR property!

  • peg leg May 7, 2009

    Raising the rates on the folks living in coastal counties applies to the waterfront houses as much as the people who live in the parts of the county farthest from the water. A lot of these are rural counties that have really been hurt by all of the development. For those who think everyone chooses to live in the coastal counties, we have military installations there (they don't get much of a choice where they live). There are also many families who have lived there for generations...I suppose they should all move to make room for more development. I am sure that will solve the issue of there being too many people living in coastal counties....