03/12/09

Statewide Steps Taken Against Beach Plan

All Hatteras Island and Dare County property owners are affected by the impending changes to the Beach Plan, and as such, the local and statewide communities have been carefully watching the developments in the fight against the Beach Plan changes.

On Wednesday, March 4, Representative Tim Spear introduced House Bill 426 and Senator Julia Boseman introduced Senate Bill 428 as a response to the impending changes to the Beach Plan.Both bills request a stay of all rate increases statewide and changes to the Beach/Fair Plans approved in November and December of last year by the Insurance Commissioner. The changes to the Beach Plan essentially includes a mandatory insurance increase for all Dare County residents. The surcharge for wind and hail and homeowners insurance will rise significantly.

The statewide increase in homeowners insurance rates is scheduled to go into effect May 1. One of the core arguments against the changes to the Beach plan is that while piedmont and mountain communities are expected to see a 4% increase in insurance rates, the coastal communities could see as much as a 30% increase.

More disturbing than the rate increase is a deductible change, according to Willo Kelly, a government affairs coordinator for The Outer Banks Association of REALTORS (OBAR.) The deductible will change from a dollar amount to a 2% formula that would require a homeowner to pay $3,000 out of pocket for each wind event for a $150,000 home and contents.

What coastal communities see as an inequity has spurred eastern counties to cooperate and coordinate actions against the increases. Legal actions were started in December by Dare County Attorney Robert L. Outten seeking to block the insurance increases. Commissioners of New Hanover and Brunswick counties have also joined the suit.

OBAR recommends that all coastal property owners contact their insurance agent to see how the rate increases will affect them. It is equally important to contact your legislators and show your support of the two new bills against the changes to the Beach Plan.

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