N.C. House panel unveils bid to fix beach insurance
Posted June 25, 2009 4:02 a.m. EDT
Updated June 25, 2009 7:35 p.m. EDT
RALEIGH, N.C. — North Carolina lawmakers have started grappling with how the underfunded Beach Plan would keep its insurance promises after a bad hurricane season.
The House Insurance Committee on Thursday began considering a proposal to cap insurers' risks from a catastrophe, and shift remaining rebuilding costs to all North Carolina policyholders.
The bill would allow every property insurance policy to rise by up to 10 percent if the Beach Plan's payouts surpass about $2.4 billion. The insurance industry says that's almost double what the Beach Plan would have had to pay if 1996's Hurricane Fran came ashore now.
"All this says is that it will help North Carolina rebuild and recover after a major catastrophe along the lines of Hurricane Hazel, not a Fran – not any of the other hurricanes that have hit – but the big one," state Insurance Commissioner Wayne Goodwin said.
Under the way the bill defines a major hurricane, the state hasn't seen a storm large enough to qualify since Hazel in 1954.
The state Department of Insurance estimates the average $600 homeowners policy could rise up to $60 a year to pay Beach Plan claims.
The Beach Plan insures 170,000 properties valued at nearly $74 billion.
The committee plans to continue its discussion next week.