If you own or plan on owing a home in NC, thank your legislators, because you are helping pay beach property premiums and pushing private homeowner's insurance companies out of the state. The next time a hurricane comes (and there will definitely be a next time, just depends on when) homeowner policies accross the state will be held accountable to help pay damages. Here is some info, forgive the length:

http://www.ncjua-nciua.org/html/about-nciua.htm

Quote :

"What is the BEACH Plan in North Carolina? Its statutory name is the North Carolina Insurance Underwriting Association, and it is an association which, as agents for the member companies, functions like an insurance company, making basic and broad property insurance available to people who are not able to buy it through the standard insurance markets. The Beach Plan was created in 1969 to cover only those barrier islands adjacent to the Atlantic Ocean. In 1998, the Beach Plan was expanded by the NC General Assembly to include the eighteen (18) coastal counties (called the Coastal Area) for Windstorm and Hail Insurance Only coverage. The plan was authorized to begin offering Homeowners Insurance Policies for principle residences effective July 1, 2003 for all 18 coastal counties. Who operates the BEACH Plan? A fourteen (14) member Board of Directors (including seven [7] representatives from the insurance industry, four [4] licensed agents and three [3] members of the general public) act as the Beach Plan policymaking body. The Plan is managed by a staff of professional insurance people, independent of any single insurance company. All property and casualty insurance companies that do business in North Carolina participate in funding the Plan and sharing any losses and profits. The Beach Plan is not a facility of the North Carolina State Government, but its operation is subject to review by the North Carolina Commissioner of Insurance. Who buys insurance through the BEACH Plan? Almost anyone can. However, most people wanting to buy insurance on their properties can sometimes get broader coverage – often at a better price – in the regular competitive market. As a matter of fact, it is recommended that an applicant try to buy insurance in the standard market before coming to the Plan for coverage. If they apply and their property meets basic fire, loss prevention and reasonable underwriting standards, the Plan will offer coverage. Does this mean the BEACH Plan will insure any property? There are reasonable standards, which must be met. These are basic things, which most people would have done already to make their properties safe, and to eliminate substandard physical conditions. An inspection of the property is required for every policy issued. This inspection is generally done by you or your producer. A completed inspection form, including a photograph, is submitted along with the basic application. The Beach Plan requires coverage to be within reasonable relationship to the actual cash value of the building. Any property built after January 1, 1970 must be constructed in compliance with North Carolina Building Codes. There are situations, from time to time, when a certificate of compliance is required, but usually the Plan receives a blanket certification from the municipality. Coverage in the Beach Plan requires receipt of a properly completed application that meets the Plans’ underwriting standards and the full estimated annual premium. "

http://www.newsobserver.com/business/story/1584071.html, http://www.newsobserver.com/1565/story/1588704.html

Quote :

"According to the Insurance Department, a few insurance companies already have either exited the state or have scaled back on the types of policies they're willing to underwrite because of concerns about their unrestricted liability stemming from the Beach Plan. The issue is that, under current law, all insurers that offer homeowner policies in North Carolina -- even those that don't write policies along the coast -- would be assessed for any and all damages the Beach Plan can't cover. Those assessments would be prorated, based on the volume of business the company has in the state."

.


http://www.insurancejournal.com/news/southeast/2008/10/21/94845.htm

Quote :

"The Property Casualty Insurers Association of America unveiled results of an independent report which found that the North Carolina Insurance Underwriting Association, a.k.a. the Beach Plan, is not financially prepared to weather a major storm. According to the Milliman report, the Beach Plan has no more than $1.5 billion available to pay for hurricane losses. However, a large storm could likely cost more than $ 7 billion, leaving a $6.2 billion deficit and affecting the Plan's ability to pay claims. "If a major storm hits and the Beach Plan does not have the ability to pay its claims, all homeowners across the state suffer," Robert Herlong, vice president and regional manager for PCI, said. The North Carolina Beach Plan was established to serve as a state fund to provide property insurance coverage for coastal homeowners in the barrier islands who could not obtain coverage for windstorm damage from the private market. The Plan has since expanded to include 18 coastal counties and offers a comprehensive homeowners policy that provides broad coverage and low deductibles at rates far below what actuaries maintain to be appropriately matched to risk. North Carolina's "plan of last resort" has become the first and only choice for coverage for many coastal homeowners. The Beach Plan currently insures nearly $70 billion worth of property and is growing its exposure at a rate of about $1 billion per month, according to PCI. "The current trend is evidence that the Beach Plan has turned into the market of first choice for many coastal property owners," said Herlong. Watkins said the state's current property insurance system could result in unintended consequences that may be harmful to all North Carolina consumers, the state's economy and future economic development. "

Quote :

"The Beach Plan's own independent actuaries said Beach Plan rates would need to be increased by 76 percent to reach an appropriate level to cover its losses and expenses. The Milliman study found that artificially low rates attract more homeowners into the Beach Plan, increasing the state insurer's exposure without adequately adding to the plan's surplus. This forces private insurers out of the market, as they cannot compete with the Beach Plan's inadequate rates. The artificially low rates also encourage future development in storm-prone regions, raising the risk of higher losses from future storms, which will in turn increase the likelihood of larger future assessments and ultimately the premiums charged to North Carolina consumers. Milliman reported that the under-funded Beach Plan threatens the availability and affordability of property insurance for all policyholders -- a statewide problem. Potential assessments are very difficult for insurers to estimate and plan for, and if insurers find their calculated risk of assessments to be too high, they could decide to leave the state rather than gamble with their financial well being."

Unlike private insurers, who are required to have enough cash in reserve (or through supplemental reinsurance) to cover probable maximum loss, the Beach Plan doesn't have to. The Beach Plan insured nearly 176,000 properties valued at $73.6 billion as of March 31.

So, all in all, the state owned Beach Plan can assess all private insurance companies that do business in the state to cover its losses.

http://www2.journalnow.com/content/2008/aug/10/beach-plan-could-leave-nc-crying-in-the-rain/

Quote :

"As things stand now, the Beach Plan insures roughly $75 billion in property in those 18 counties. The plan's probable maximum loss is about $4 billion. The Beach Plan has about $650 million in the bank and another $1 billion in reinsurance coverage. That leaves $2.5 billion uncovered -- losses that would be passed on to private insurance companies based on their market share. "

I just found out that Allstate will no longer sell homeowner's insurance unless they cover your vehicles (they already didn't sell at the beach).

Farmer's insurance no longer sells homeowner's in the state.
http://www.news-record.com/content/2009/06/27/article/insurance_premiums_may_go_up

Feel free to email Wayne Goodwin about it (on the right)

http://projects.newsobserver.com/under_the_dome/profiles/wayne_goodwin

Btw, not sure if this most current as Commissioner, but he made 117k as "DEPUTY SECRETARY/COMMISSION III" http://www.charlotteobserver.com/data/story/418239.html?appSession=292178236818123

6/30/2009 9:25:17 AM

Oh I forgot all of the unemployed hacks in here don't own any land

6/30/2009 12:49:50 PM

or your thread sucks. either way.

6/30/2009 12:53:54 PM

^^ I'm just curious, but what menial job is it you do mister Domestic Beer major?

Anyway, about the topic, I don't really understand how this plan is set up and structured.

Quote :

"The Beach Plan is not a facility of the North Carolina State Government, but its operation is subject to review by the North Carolina Commissioner of Insurance. "

It seems as though private insurers are forced to pay into the plan if they want to do business in the state. Is that mandated by the government or...?

[Edited on June 30, 2009 at 1:14 PM. Reason : .]

6/30/2009 1:12:33 PM

Quote :

" OP 6/30/2009 9:25:17 AM MattJM321 Oh I forgot all of the unemployed hacks in here don't own any land 6/30/2009 12:49:50 PM"

how timely -
"6 New Personality Disorders Caused by the Internet"

Quote :

"#5 Low Forum Frustration Tolerance (a.k.a. The Frantic Browser Reloader) This is the guy who makes a new thread, knowing he's just written the absolutely perfect post. A post that should be heralded across the Internet for its beauty, comedy and insight. It is such a good post that the guy is checking every five seconds to see if there is a new response. If he gets a response he quickly dashes out his own reply that will appear half a second later. If there are no responses to his perfect post then he will wait an eternity of five minutes before replying to his own thread with, "What, nobody has a comment? Helloooo???""

http://www.cracked.com/article_17522_6-new-personality-disorders-caused-by-internet.html

6/30/2009 1:40:39 PM

Great, so what do we all think about this government mandated insurance program? Are you angry that private competition is skipping the state?

6/30/2009 7:42:40 PM

I asked a question fuck face. Can you answer it?

6/30/2009 7:43:47 PM

im unemployed

and dont own land

dont care

6/30/2009 7:50:40 PM

It's not exactly insurers that are paying for it, it's the insured in this case.

[Edited on June 30, 2009 at 10:01 PM. Reason : no jerbs]

6/30/2009 10:00:14 PM

let's all go build on unstable, vulnerable barrier islands and make somebody else foot the bill when nature does what it has for eons.

7/1/2009 12:04:14 PM

Quote :

""If a major storm hits and the Beach Plan does not have the ability to pay its claims, all homeowners across the state suffer," Robert Herlong, vice president and regional manager for PCI, said. "

The major storms that would have to hit, according to the proposed beach plan, is a Hurricane Hazel type storm. One major storm that NC hasn't even had SINCE Hurricane Hazel. A Fran or a Floyd would not even qualify as a major storm by the proposal.

SO...it's not "the next time a hurricane comes," it's "the next time a hurricane like Hazel comes."

7/1/2009 1:44:09 PM

Would someone take a minute away from their rage to actually explain how this program is funded and how it exists. Who controls it. Etc. Surely, in all your rage you took the time to understand what the fuck it was you were reading rather than just be pissed off at the sound bite pieces.

1) Particularly, are the taxpayers on the hook directly to backstop losses
and
2) Are private insurers forced in some way to pay into this plan to do business

None of you fucks that are so enraged about this news item knows these answers?

Because, it looks like to me the private employers are part of this association willingly

Quote :

"All property and casualty insurance companies that do business in North Carolina participate in funding the Plan and sharing any losses and profits"

Additionally, can someone please explain why they are "leaving the state". That again implies they are forced to pay into it, yet

Quote :

"The Beach Plan is not a facility of the North Carolina State Government"

SO

WHAT

THE HELL

GIVES?

7/1/2009 1:53:42 PM

I sent this to Sonya Champion, listed as Administrative Manager on their "Contact Us" website:

Quote :

"Hello Sonya, I just had a simple question regarding something that I read about the FAIR plan. I read from the News and Observer that some insurance companies are leaving North Carolina due to the potential losses this plan could inflict upon them. On your website it states that: The FAIR Plan is not a facility of the North Carolina State government . In that case, what is forcing an insurance company to buy into the plan if it is not the State of North Carolina? I was just curious as it doesn't make much sense for insurance companies to no longer do business in our state if being part of the FAIR plan wasn't mandatory. Any information you can provide regarding this will be very appreciated."

I'll post her reply, if any.

7/1/2009 3:35:51 PM

^ OMG POST #666!!!! IT'S EVIL

7/1/2009 5:57:26 PM

Quote :

"Dear Mr. Disco_stu, The FAIR Plan (NCJUA) and Beach Plan (NCIUA), by each Plan's statute, are residual property associations supported by all insurance companies licensed to write property insurance in the state of North Carolina. Our website mentions that the associations are not a facility of the state of North Carolina so that consumers will know that they are not state supported organizations. I am not sure of the specific news article you reference, however the recent media attention has been on the Beach Plan (NCIUA) due to the substantial growth of coastal exposure within the Beach Plan. The primary issues of discussion by legislators and insurance companies operating within the state include property rate adequacy concerns (rates are approved by the NC Commissioner of Insurance), profitability concerns due to potential catastrophic wind losses from hurricanes and, as mentioned, the Beach Plan growth. Additional responses to your specific questions and concerns might be best answered by your legislators and / or by the NC Commissioner of Insurance office. Your insurance agent might also be another source of information. Sincerely, Lee Dunn"

Not sure if they answered the question. Either way I'm out.

7/2/2009 10:51:27 AM

Ok, as best I can tell, the Insurance Commission sets the rates that the insurance companies can charge, and perhaps they cap that somehow? I can definitely see how this would cause problems. What happened was the private insurers got together and figured out another way they could profit by tapping into a market that any single insurer didn't want to meddle in, the coast. So they got together to spread out the risk across all of them and in turn they make a little extra cake providing wind/flood insurance. Though, it seems odd that somehow the rates via this avenue are lower than the private insurer. You have to wonder who was managing the beach fund to let it get like this.

I can imagine after the decade worth of run up in coastal property prices, and with the downturn making everyone look at their bottom lines more, someone finally started taking a hard look at the numbers and realized that they were on the hook for big time losses and weren't charging high enough rates to cover it.

But I'm still not sure who the gatekeeper is and why they can't just raise the rates.

Thats my best guess without bothering to read and study it (not that interested).

7/2/2009 11:35:12 AM

http://www.newsobserver.com/politics/story/1601024.html

Another update.

Quote :

"The Beach Plan has promised insurance coverage to properties valued at nearly $74 billion, but its resources top out at about $2.4 billion. Beyond that, the Beach Plan would turn to all of the state's property insurers to pay claims. Lawmakers are proposing changes that include capping how much insurers would be assessed after a bad hurricane and shifting the remaining rebuilding costs to all North Carolina policyholders. "

Lee Dunn didn't answer anything.

[Edited on July 9, 2009 at 12:30 PM. Reason : .]

7/9/2009 12:29:10 PM