Homeowners will be on the hook for financial losses if a monster hurricane destroys more property than the state's emergency insurance pool can afford to cover.
The General Assembly approved the bill Thursday amid concerns that more insurance companies will stop doing business here without state homeowners providing a financial backstop for catastrophic hurricanes, John Murawski reports. It will become law when it is signed by Gov. Beverly Perdue, as is expected.
The bill requires homeowners to pay a surcharge, not to exceed 10 percent of their annual premiums, to cover storm damage that exceeds the financial capacity of the Beach Plan, an insurance plan created by the state for people who can't get coverage elsewhere. For the average homeowner, the surcharge will be capped at $65 a year, based on the typical amount of insurance policies in the state.
Triggering the surcharge would require what some call a once-in-a-century storm. It's estimated that a hurricane would have to cause $2.4 billion in damage to trigger the surcharge on homeowners, and a much larger storm for the surcharge to hit the annual cap.
The biggest payout to date by the 40-year-old Beach Plan has been $130 million for damage caused by Hurricane Fran in 1996. That was significantly less than the $2.4 billion the Beach Plan currently can access to cover storm damage.
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Beach plan needs to be dissolved. Your risk, not mine
I just can’t believe I am one of the few who have a problem with being held liable for homes in high risk coastal areas. I know the argument of it would take a storm of the century to trigger the surcharge, but my problem is that we are all now liable for the overdraft of this government created entity. And I know how the legislative branch works and I am sure as they did in 1998 and 2003, they will try to expand this program, which is for last resort insurance, into even more counties. Next the western counties will need assistance getting insurance for landslides and so on and so on. That will increase the carried liability to a point that it will be triggered by an event and we will all be paying for the repairs of those who insist on living in high risk areas but don’t feel that they should pay the full price for it.
At least the cap should be reduced substantially to less than $400,000, maybe even to less than $250,000. I am sure that the people who we are supposedly trying to help have structures that are closer to or less than $250,000. Most of the value in these homes is in the ground. Covering a structure that is $1,000,000 or even the now agreed upon $750,000 includes a lot of homes that are well beyond the average level and don’t need subsidies from the average person who does not live in a risky area.
If you live in these 18 counties you need to pay the full price for your risk or move. Stop looking for handouts from those of us who don’t take risks like you.