Coastal residents in NC are trying to fight a deal that would allow insurance companies to increase the rates for property insurance in these high risk regions. Of course, the flip side of the deal is that residents living far from the coast in the west of the state will see their premiums cut by a third.
The municipalities argued Long approved the increases before coastal residents knew insurers had requested them and set rates at unreasonably high levels.
…The General Assembly last summer was forced to shore up the overextended Beach Plan by capping potential costs to insurers and putting every property owner in the state on the hook from a disastrous hurricane season. Some insurers had threatened to quit doing business in the state to limit their exposure to Beach Plan losses unless the program was bolstered, current Insurance Commissioner Wayne Goodwin warned last summer.
Sure it will hurt those living along the coast when their rates go up, but really, they should have been that high (perhaps higher) from the start. When insurers can’t charge rates that truly reflect the risk of the properties they insure they have to charge everyone more. So safer folks far away from the beach end up paying for the riskier decisions of beach homeowners.
If the rates hadn’t been artificially suppressed by interventionist government policy for political reasons, the need for an increase might not be necessary. In fact, had the rates been higher to begin with some of the coastal residents now complaining that they can’t afford the increase might never have purchased homes on the beach in the first place.