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| Bills Seek Moratorium on Insurance Hikes |
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| Friday, 06 February 2009 12:24 |
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Bills seek moratorium on insurance hikes
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(Source: State Port Pilot)
Two bills filed with the N.C. General Assembly seek a “temporary stay” on the approved increases for homeowner insurance and for the new deductibles and surcharges for policies under the Beach Plan. N.C. Sen. Julia Boseman, a Democrat from New Hanover County, filed Senate Bill 6 last Wednesday. It went to the committee on commerce the following day. N.C. Rep. Timothy Spear, a Democrat representing Chowan, Dare, Hyde and Washington counties, filed House Bill 26 Thursday. The bills are in response to former insurance commissioner Jim Long’s approval of a new homeowner insurance rate schedule — Brunswick County is set for a nearly 30-percent rate increase May 1, higher than any other territory — and the Beach Plan’s new deductibles and surcharges that went into effect Sunday. Long, who approved the series of changes in November and December, passed away Monday after complications following a stroke he experienced January 21, according to the N.C. Department of Insurance. He retired from office shortly after approving the changes and made way for new insurance commissioner Wayne Goodwin, a Hamlet native elected to the post in November. “The increase from 15 percent … to 25 percent in the (Beach Plan) factor or surcharge for homeowner coverage approved by the Department of Insurance on November 21, 2008 … shall not apply to homeowner coverage issued by the (Beach Plan) for a homeowner’s or applicant’s permanent residence,” section one of Senate Bill 6’s first edition reads. Section two asks for the same stay on the surcharge for homeowners’ windstorm- and hail-only coverage, which on November 21 Long approved to increase from five percent to 15 percent. The bill further seeks a stay on the effective Beach Plan deductible increases, which went from one to two percent on February 1, except for on Bald Head Island, whose deductible increased to five percent. Finally, the bill calls for a moratorium on the homeowner insurance rate increases agreed to by the N.C. Rate Bureau (NCRB) and approved by Long in December. House Bill 26 is identical except for its inclusion of a section seeking a stay in increases set for certain territories under the Fair Access to Insurance Requirements (FAIR) Plan, which is similar to the Beach Plan. The stay would, like the other sections, pertain only to permanent residences. Brunswick, New Hanover, Onslow and Pender counties are scheduled for the state’s highest homeowner insurance rate increases at nearly 30 percent for the mainland and 17.5 percent for barrier islands. Prior to Long’s decision, the NCRB filed for increases as large as 70 percent along the coast, sending homeowners into rage and worry. NCRB sought the increases, which would have averaged 19.5 percent statewide but now will average 4.05 percent per Long’s approval, to pad private insurance companies against assessments and potentially large payouts to policy-holders in event of a damaging hurricane. Those assessments would come from managers of the Beach Plan. The state created the Beach Plan in 1969 and limited it to barrier island coverage, where private insurance groups generally offered none. The N.C. General Assembly in 1998 expanded the Beach Plan to offer full homeowner insurance plans in the 18 coastal counties. The plan has the power to weigh assessments on private insurance companies for additional money if needed.
The similar FAIR Plan applies to the entire state, with the exception of the barrier islands. It is available to property owners who would otherwise be denied a private plan due to risk. The Brunswick County Board of Commissioners on January 26 contributed $10,000 to a fight Dare County and the Town of Nags Head are leading against the increases. While Brunswick is among counties facing a nearly 30-percent insurance rate jump, some areas are scheduled for no change or a decrease. Among them is Charlotte, set for a four-percent drop. The increases and those pertaining to the Beach Plan and FAIR Plan came without input from the public, sparking the legal battle Dare and Nags Head are leading for a more “fair and equitable” approach. The first request for a rehearing regarding the Beach Plan and FAIR Plan increases Thursday in Raleigh failed after an official with the N.C. Department of Insurance filed for its dismissal. Dare County attorney Bobby Outten said that decision was appealed to a superior court judge Monday, and the fight would continue. The Brunswick County Association of Realtors (BCAR) is another group fighting the increases with phone calls to Raleigh while rallying local officials and residents. BCAR governmental affairs director Steve Candler said he is glad state officials are “stepping up to the plate” with Senate Bill 6 and House Bill 26. But he said he’s troubled that the bills only look out for primary residences and not the many secondary residences owned in the affected areas. A legislative committee he met with Tuesday morning, however, apparently supported the inclusion of secondary home coverage in House Bill 26. He had not heard of such support on the senate side. Candler said he understands that in order for the bills to sell to senators and representatives across the state, keeping the interest for primary residences might be crucial. “But North Carolina gets $44 billion from the economy on the coast,” Candler said. “They need to take a harder look at it.” For the Beach Plan deductible and surcharge increases that went into effect Sunday, each bill calls for refunds. The bills would expire May 1, 2011. Sen. R.C. Soles, whose district includes Brunswick County, is also a sponsor of Senate Bill 6. Rep. Bonner Stiller has signed onto House Bill 26. |