NC Beach Plan is fixed, or is it?

By
Industry Observer with Zeus Construction

NC Beach PlanSo, 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.Homeowners insurance

Not quite.

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.

Hurricane Hazel

Homeowners insuranceSo 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.

 

Cameron Bagherpour
Agent
Allstate Insurance
Cary, NC
919.460.0606

Posted by

Cameron Bagherpour
Real Estate Developer, Investor
Medway, MA 02053
919-434-9001

 

Comments (2)

Ginger Harper
Coldwell Banker Sea Coast Advantage~ Ginger Harper Real Estate Team - Southport, NC
Your Southport~Oak Island Agent~Brunswick County!

I do not think so...I am on Oak  Island. Needs some tweeking..

Ginger of Oak Island

Sep 16, 2009 01:36 PM
Cameron Bagherpour
Zeus Construction - Medway, MA
Construction. Development. Investment.

I have to agree with you, Ginger.  Unfortunately, it seems that it won't get the fix it needs until we get clobbered by a couple of storms.  I would prefer we get the fix done before we have to face that situation.

 

Cameron

Sep 23, 2009 04:16 AM