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N.C. House takes final look at Beach Plan fix

Posted August 6, 2009

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— North Carolina legislators take a final look at legislation that insurance companies have been wanting for months and consumers find difficult to welcome.

The House will consider final approval Thursday for a bill that aims to support the state Beach Plan, an underfunded coastal insurance that insurance regulators warned was becoming a problem for property owners statewide.

The Beach Plan provides wind and homeowners insurance policies in 18 coastal counties. Originally created as a insurer of last resort, it now covers nearly $74 billion worth of property, but its resources top out at about $2.4 billion.

As it stands, the Beach Plan requires that once its resources are exhausted, property insurers statewide must cover the rest of the claims.

However, some companies have threatened to leave North Carolina if their now-unlimited risk wasn't capped, State Insurance Commissioner Wayne Goodwin has said.

Insured property owners statewide would be on the hook under the bill moving through the General Assembly.

Assessments on insurance companies liabilities would be capped at $1 billion. To cover larger losses, the insurance commissioner would add a surcharge of 10 percent on all North Carolina homeowners' premiums until the coastal property holders' claims are paid off. The surcharge would be about $5.40 a month for an average $650 annual homeowners policy.

The bill was approved by the Senate Wednesday after being passed by the House in mid-July. The House must now look at the amended bill.

Goodwin originally backed plans by former Insurance Commissioner Jim Long to raise the Beach Plan's surcharges for homeowner's coverage by 25 percent and for wind damage by 15 percent. Those increases drew stiff opposition from coastal property owners and legislators.

Goodwin has said the bill in the General Assembly isn't the best one, but waiting for a perfect fix could be disastrous.

"If we don't act this year, in terms of the legislative process we have, it could be two years before we have a chance to reform it again," he said. "That's two hurricane seasons."

37 Comments

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  • yellow_hat Aug 6, 2009

    jonmac - the reason there is no "Ice Plan" is one is not needed. Insurers have determined the risk is not substantial enough to drive them away from the business. Not so with the Beach Plan - there the insurers have decided the risk is not worth the business - so the reasonable thing is for those wanting insurance to pay a premium high enough to make insuring them worth the risk. BUT our state government has decided that those of us living in areas of less/low risk should subsidize those living in areas of high risk.

    Well isn't that special! Since property tax rates are low in many coastal counties, but high in Wake county, can I assume that the coastal counties are going to pitch in and help me out with my property tax?

  • lilesb1 Aug 6, 2009

    This proposal is more benefical than leaving it like it is now. Homeowners rates will continue to increase astronomically if the problem isn't resolved. This is what happens when the government interfers with a free market. If the bill passes, homeowners may see some relief in their current premiums.

  • whatelseisnew Aug 6, 2009

    Once again the Democrats invade your wallet.

  • time4real Aug 6, 2009

    i'm not paying for their problems on the coast, i'll subtract that amount from my ins. payment and if the ins. co. doesn't like it, TOO BAD! if the lawmakers don't like it, TOUGH STEW!

  • kingfather Aug 6, 2009

    Please everybody, just remember CLEARLY the DEMOCRATS control both the legislature and the governor's office. They're the ones who are bring you higher income taxes, higher sales taxes, higher liquor and beer taxes, higher homeowners insurance premiums, higher costs to allow athletes from out of NC to get instate lower tuition at all NC colleges!! For God's sake remember that next election and don't blindly vote Democratic straight ticket and return these fools to power----unless you're enjoying this debacle and want them to continue STEALING YOUR hard earned money! PLEASE let's retire Hackney, Rand, Basnight, and all of those who can push this down our throats, in the name of their retaining power to do as they please---not what is best for the citizens of NC.

  • nufsaid Aug 6, 2009

    Basnight and Rand support this. Is there any chance that they may benefit more from this than the citizens of NC?

  • Viewer Aug 6, 2009

    "Insured property owners statewide would be on the hook under the bill moving through the General Assembly."

    If those folks want to build in a dangerous area why should the rest of us pay for their life style?

    I will undertake a quiet, unpublic economic boycott of the coastal counties of NC, they will already have their hands on my wallet. SC and Va beaches are fine.

  • nufsaid Aug 6, 2009

    "It should be a choice, not a mandatory fee.
    gordonbabe"

    But it is a choice. Just overlook that the Libs, and especially the current administration, believe that they can make the choice better than you can. If the choice happens to solidify their hold on power, so much the better.

  • gordonbabe Aug 6, 2009

    I can understand PART of this... but what about these other folks that just moved in? What about these people that go back and REBUILD after the hurricanes just came through? Should the NC homeowners really be held accountable for that?

    It'd be like me buying a drunk driver a new car every time he wrecks one knowing full well that he's going to drive it back to the ABC store, get a fifth and drive that car into another wall!

    It should be a choice, not a mandatory fee.

  • nufsaid Aug 6, 2009

    Of course if Marc Basnight is for this it must be beneficial to NC citizens. Right?

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