State Farm Drops Coastal Coverages — BASE Responds

According to a statement released by State Farm, the insurance giant will be dropping coverage for homeowners on North Carolina’s barrier islands effective this spring. Roughly 1,600 customers can expect to receive a notice that their policy expiring after May 1 will no longer be renewed.

During the 2009 Legislative session, BASE worked with legislators and representatives from the insurance industry to shore up the finances of the Beach Plan, in order to encourage the private market to continue to write wind policies and to encourage more companies to come to NC to write polices.  Although the legislation enacts positive changes to the Beach Plan surcharges and deductibles, it did not address the additional 2009 increases of 17.5% on the region’s barrier islands and 29.8% in Brunswick, New Hanover and Pender Counties.

“This recent action by State Farm is a step in the wrong direction and undermines the progress made during the last Session. Now these 1,600 policy holders have been put into a situation where the only probable option is the Beach Plan/Coastal Property Insurance Pool. And in some cases, these homeowners will see significant increases by having to get additional coverage through non-admitted carriers such as Lloyds of London, etc.,” said Donna Girardot, BASE CEO. “We need to follow through with the provision from the legislation passed this Session, which would enable a committee to conduct a comprehensive review of insurance policy in North Carolina.”