|Coastal Homeowners Insurance|
In late 2008, the outgoing Commissioner of Insurance for North Carolina approved significant changes to both basic homeowners insurance rates and the rates which apply to the mandatory wind and hail coverage (called the Beach Plan) coastal homeowners must carry. For some coastal citizens these increases meant a 30% increase in basic homeowners insurance in addition to significant Beach Plan increases including a proposed 2% deductible and highly increased surcharges.
Unchallenged, these impacts would have been tremendously detrimental to our coastal communities and eastern North Carolina as a whole. To mitigate the impacts the increases would have caused, BASE worked with our local governments, state lawmakers, citizens, industry partners and media to illuminate the issue and lead the effort for reform. To keep the issue at the forefront, BASE was frequently sourced in print and radio, appeared on WILM's Byline:Wilmington, served on a coastal insurance panel at the 2009 Shape of the Coast meeting and even garnered a specific mention in the August 12, 2009 Wilmington StarNews editorial for our efforts. BASE has been working on the homeowners insurance for a number of years but served as the primary lobbyist on behalf of the interests of all in the 20 coastal counties during this latest discussion. However, without the support of our legislative leaders, local governments and our members, e ven a small amount of change would have been impossible.
PART ONE PART TWO PART THREE
BASE Governmental Affairs Director Tyler Newman discusses Homeowners Insurance with WILM's Donn Ansell on Byline: Wilmington
Homeowners Insurance Rate Increases:
Over the last 6 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%
Myths and Misconceptions:
Need statewide equity in homeowners rates
Need affordability and availability for consumers
Need stable and predictable environment to encourage companies to write policies statewide
NOW WHAT ARE WE GOING TO DO?Through the Williams Mullen Law Firm, Dare County, the Town of Nags Head, Starco Realty & Construction, Inc., and Joseph M. Geraghty initiated four separate legal proceedings, including a lawsuit and an appeal to the North Carolina Court of Appeals, challenging Beach Plan increases and homeowners rate increases as approved by the NC Department of Insurance in late 2008.
CRITICAL LOCAL SUPPORT: A number of local governments, including the Town of Southern Shores, Duck, Nags Head, Kill Devil Hills, Pine Knoll Shores, Emerald Isle, Indian Beach, Kitty Hawk, Surf City, and the Counties of Dare, Currituck, Beaufort, New Hanover, Pender, Brunswick, Craven, Carteret, Hyde, and Washington agreed to join the challenges as named parties and to provide financial support.
The lawsuit that was filed contesting the Beach Plan increased surcharge and increased deductible is before the Court of Appeals. In the lower court, on March 20, 2009, Wake County Superior Court Judge William Pittman issued a stay finding that the Commissioner did not act according to law, The implementation of the Beach Plan surcharge and deductible increases are stayed while the appeal is being heard. It is unknown how long it will take the Court of Appeals to rule but generally it takes months.
The lawsuit that was filed contesting the homeowners rate increases is also before the Court of Appeals. A different judge in the lower court ruled against, saying that the parties did not have standing to sue and did not grant a stay of the rate increase. This decision was appealed to the Court of Appeals—a case which was heard in January 2010. As such, the rate increase approved by the Commissioner and effective on May 1 are in place.
LEGISLATIVE CHANGES TO THE BEACH PLAN
BASE served as the lobbying force for the 20 coastal counties as the homeowners insurance issue was deliberated by the North Carolina General Assembly in 2009. While the legislation focused on the Beach Plan and not homeowners insurance as a whole, the result was tremendously important to all North Carolina citizens. Without a financially viable Beach Plan, insurers would be hesitant to write policies throughout North Carolina, due to the unknown risk. So, what did we accomplish?
PASSED BY NC GENERAL ASSEMBLY, Signed into law by Governor Perdue on Wednesday August 26, 2009
Overall, increased transparency and public input of Beach Plan activities and actions of the Rate Bureau.
Downside of HB 1305:
HB 1305 calls for Legislative Research Commission to study:
WHAT'S ON THE HORIZON: