Press Release
For release immediately
Re: The North Carolina State Senate Action on the Beach Plan
On May 1, 2009, portions of Brunswick, Carteret, New Hanover, Onslow, and Pender Counties received rate increases from the Insurance Commissioner for ALL homeowners of 17.5%, portions of Currituck, Hyde, Dare, and Pamlico Counties received rate increases for ALL homeowners of 22%, and portions of Brunswick, New Hanover, Onslow, and Pender Counties received rate increases for ALL homeowners of 29.8%. Inner Banks counties received rate increases which were not as high, but which still represented rates far higher than actuarial data would suggest is fair.
Over the last six years, the Department of Insurance estimates that homeowners insurance rates in the Beach Plan beach area have increased 90%, and rates in the Beach Plan coastal area have increased 65%.
Seven of the counties included in the Beach Plan's beach and coastal areas are classified by the Department of Commerce as Tier One counties, meaning that they are among the 40 most economically distressed counties in the State and are eligible for the highest level of economic development incentives.
Nine of the counties included in the Beach Plan's beach and coastal areas have poverty rates above the statewide average and median family income below the statewide average, according to U.S. Census Bureau 2007 estimates.
57% of properties insured by the Beach Plan have an insured value for building and contents of $300,000 or less.
The original version of HB 1305 would have imposed surcharges on those areas by 10% for wind only and 20% for homeowners policies. However, the Senate reduced the rates to their previous levels of 5% and 15%, respectively.
In addition, this bill also:
- Reduces mandatory personal contents coverage under the Beach Plan from 70% to 40% and mandates that premiums reflect the reduction in contents coverage.
- Mandates that mitigation credits be given to homeowners who make the effort to build or renovate their homes to withstand strong winds. (storm shutters, special windows, etc.) These building methods will reduce the loss of property.
- Requires the beach plan to provide to anyone in the general public information on its operations and activities.
- Requires a study of changes to the composition of the board of directors of the beach plan and the filing of rate cases for homeowner’s policies statewide
- Allows installment payment of premiums to assist homeowners faced with larger premiums
- Keeps a 1% deductible on a named storm damage instead of the previously proposed 2 – 5% deductible on any wind damage
- Requires an annual audit of the Beach Plan Association (NCIUA)
- Requires a review and adjustment, if required, of insurance territories to achieve more equity regarding risk vs. premiums paid.
For further information please contact:
Danielle Byrd
Danielle@nc-20.com
252-948-0550
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