The Senate sent its version of a bill that would shore up the state's coastal insurance plan back to the House for a final vote.
The bill would allow the state-created insurance plan known as the Beach Plan to assess a surcharge on homeowners and businesses across the state if a storm generates more claims than the plan can pay.
The Senate backed off a proposal that would have raised the cap for coverage under the plan from $750,000 to $1 million. Senate Leader Marc Basnight, a Manteo Democrat, begrudgingly agreed to the reduction, which was proposed by Sen. Phil Berger, an Eden Republican and the chamber's minority leader.
"He and his colleagues are demanding that it occur," Basnight said. "I hope you are proud of it."
Berger said he moved for the cap because it would be hard for many senators to go back to their non-coastal districts and explain why insurance might be more expensive because million dollar houses were destroyed.
"The idea that this plan covers property up to $1 million, I think, creates a real political problem for many of us who are willing to support a compromise bill," Berger said.
The $750,000 cap would give the bill an easier time back in the House, said Rep. Hugh Holliman, a Lexington Democrat and the chamber's majority leader.
Comments
Re: Senate sends beach bill to House
August 26, 2009 - 3:45pm — mav6000I just want to lend some perspective here. I have a small house in Brunswick county, walking distance to the beach, not on the beach. It's a small, older home, about 1,100 square feet, and nothing fancy (it was built just to be someone's vacation home in the 80s). Rebuild estimate is $80,000 for which I have coverage.
Since the house is financed, the law requires that I carry The Beach Plan (mostly wind), a separate Homeowners policy, and Flood.
The total of all 3 have over doubled in the last 5 years, which is how long I've owned the house.
I've heard many say that homeowners near or on the beach are getting large subsidies and cheap insurance from the government. Let me assure you, this is not true.
This year, I will pay $4,200 in insurance. That means, all things remaining equal, in 20 years I'll have paid enough insurance totally rebuild my house, whether it's ever damaged or not. And, that's using the absolute highest deductible available for each plan, so they'll never really pay out the whole $80,000. And that's only if my house is totally destroyed.
And, consider that, since the house was built in 1984, it's never had any significant damage from a hurricane. Keep in mind they won't all pay, only the one that is deemed to have the coverage for the cause of damage.
My old house in an inland county had 1 insurance policy that covered everything, payed up to $250,000 to rebuild and cost $525 a year. That means I would have to pay that amount for 476 years before I'd reach the $250,000.
I wish NC law did not require me to have these insurances, but it does. But no one should imagine that these insurance policies are not making money. This is just insurance companies and politicians doing what they do best, which is collect money.
And, by the way, I really don't think taxpayers all over the state should cover the expense of someones beach house, but I truly doubt that's ever going to really happen. And I do think there should be a cap on the value covered.
However, I lived in Charlotte when hurricane Hugo plowed through, which showed hurricanes can make a huge mess inland too. Charlotte suffered heavy damage, and a lot of million dollar houses got damaged, but everyone was covered by their normal homeowners insurance, despite the fact it was still a hurricane as it passed through Charlotte.
So maybe everyone within 200 miles of any coast should have to be on the Beach Plan too, and pay a rate respective to risk.
Re: Senate sends beach bill to House
August 6, 2009 - 10:34am — PlaybyPlayI still say it is not my problem that you want to live in a higher risk area than I do. The same can be said for those living on the west side of the state.
I am sorry, but the Beach Plan has never charged a fair rate for premiums and was to be an insurer of last resort "created by the state government." But it has become the insurer of first choice and the plan has nowhere close to the reserves that are needed to ensure solvency in case of a major hurricane. This has allowed more people to build in high risk areas without fully paying for the cost of those developments. Why should the state government and the residents across the entire state be held liable for the homes in 18 counties?
The state government should stay out of this and dissolve the beach and fair plan completely. Let those people find their own private insurance. If they can’t afford it or companies refuse to cover high risk areas, then move.
In addition, the cap should be much lower, under $400,000. For many high risk homes in those 18 counties, a large portion of the home value is in the land under the house. Why should we subsidize structures that cost as much as $750,000? That is a lot of structure. Bring it more in line with average structure costs so that we who live in lower risk areas don’t have to pay for those who seem to think everyone should pay for their risk.
Re: Senate sends beach bill to House
August 6, 2009 - 9:32am — starcoconstLets try and explain again. The Beach Plan is private.The state is not in the insurance business. The insurance industry wants this bill to protect them and wants the cap at 1 billion. The 2.4 Billion in reserves and re-insurance is more than the total damage over the last 25 years. The Beach plan is profitable and the insurance companies have been taking the money our for years. Only 26% of wind damage claims for entire state were paid to the 20 coastal counties. Coastal homeowners already pay 300=400% more than inland plus carry flood insurance. This bill was pushed by lobbyists and let me assure you that residents on the coast do NOT expect inland counties to subsidize us. We subsidize you. Check the facts before you keep playing the insurance industry game of Geographical war of Eastern Carolina against the West. Remember that you are going to need help getting landslide insurance in the mountains.
Re: Senate sends beach bill to House
August 6, 2009 - 5:52am — meltedBasnight can just go sit in a corner, suck his thumb and cry. Let him pay for all the beach houses in his district destroyed by storms rather than the rest of the state.
Enough with the surcharges
August 5, 2009 - 10:28pm — PlaybyPlayI think this is crazy. Let the people in those 18 counties that get the benefit from this pay for it. I get nothing from this and don’t understand why I am called upon to pay for people’s beach houses.
Why is the state of North Carolina in the insurance business anyhow? If they can’t get insurance then that is their problem and should have been a factor in buying the place.
I already might have a surcharge on my taxes, please don’t make me know be responsible for some ones beach house repairs.