North Carolina Beach Plan Advances

A bill intended to reform the state storm insurance program in North Carolina is on its way to the Governor’s desk, after both houses of the legislator passed HB 1305 by wide margins.

Specifically, the bill places an absolute cap on insurers’ post-storm assessments at $1 billion, and mandates that commercial and residential property insurance policyholders throughout the state would pay a surcharge of up to 10% of premium per year to cover any amount above $1 billion.

“This is a strong reform bill,” Raymond Farmer, assistant VP, Southeast Region, for the American Insurance Association said in a statement. “It meets two key goals: first, putting the Beach Plan on a stronger financial footing, and second, giving private market insurers greater certainty as to their ultimate financial obligations should a major storm hit that depletes the Beach Plan’s claims paying resources.”

The bill encourages homeowners to take steps to harden their homes by providing mitigation discounts to policyholders in coastal areas. To further limit losses, Beach Plan coverage will now be limited to homes valued at $750,000 or less, down from the current $1.5 million, and also limits contents coverage.