So, you might want to compare the discovery of seedless watermelons with the 'fix' that our wise leaders in Raleigh came up with for the beach plan. As in, we have seedless watermelons now - it's done, case closed, for now and forever, with no need to look back.
So what did they do to 'fix' the Beach Plan? Let's take a closer look:
1) Only $750,000 of coverage will be available to Beach Plan homes as compared to $1,500,000 before.
2) The home insurance companies will have to pay the first $1,000,000,000 (Billion) of excess hurricane damages.
3) After the first $1 billion in excess storm damages, ALL NC HOMEOWNERS ACROSS THE STATE WILL BE SURCHARGED 10% ON THEIR HOMEOWNERS INSURANCE. So, yet again, the consumer is on the hook for the beach plan.
4) After that, the home insurance companies will pay the remaining excess damages.
So they essentially put a band-aid on the problem
Ok, so how bad could it be? The beach plan has reserves of approximately $1.5 billion available to pay for hurricane losses. However, a large storm could potentially wreak over $7 billion in damages, leaving over $5 billion in excess losses.
But that's the good news. If we get hit by a SECOND or THIRD storm, ALL OF THE LOSSES ARE CONSIDERED EXCESS and we will end up with bankrupt home insurance carriers across the state. Our home insurance market will closely resemble Florida's of a few years ago where there was one carrier - the state sponsored one. And that isn't an environment that anyone looks forward to.