Legislative leaders form hurricane study committee
Posted September 12, 2008 12:04 p.m. EDT
Updated September 12, 2008 7:06 p.m. EDT
Raleigh, N.C. — The North Carolina General Assembly has formed a committee to examine the effects a major hurricane could have on the affordability and availability of property insurance, legislative leaders said Friday.
The Joint Select Study Committee on the Potential Impact of Major Hurricanes on the North Carolina Insurance Industry will consider the possible effects of Category 3, 4 and 5 hurricanes on the state insurance market.
Senate President Pro Tempore Marc Basnight, D-Dare, said the committee will help lawmakers better understand the steps necessary to provide property insurance to consumers.
“Homeowners should have confidence they are protected if there is a natural disaster, and this committee will give us some ideas about how to improve our existing system,” House Speaker Joe Hackney, D-Orange, said.
Last month, California-based Farmers Insurance decided to drop 40,000 homeowner policies in North Carolina because of concerns of overexposure to financial risk if a hurricane were to cause major property damage in the state.
According to the Insurance Federation of North Carolina, the Beach Plan, the state insurance pool covering 18 coastal counties, can cover up to $2.5 billion in losses in the event of a hurricane – far short of the $75 billion in property damage that the federation says could result from a severe windstorm.
Sen. Tony Rand, D-Cumberland, and Rep. Hugh Holliman, D-Davidson, will chair the committee.