Property owners in Emerald Isle and all of coastal North Carolina will soon be facing significant insurance premium increases for homeowners and wind & hail policies.  Two recent decisions by the NC Insurance Underwriting Association (offers the "Beach Plan") and one recent decision by the NC Rate Bureau and Commissioner of Insurance will begin to impact Emerald Isle policies in the next few months. 

 

One of the changes to the Beach Plan is an increase in the surcharge over private market rates for full peril policies - from 15% to 25%.  The surcharge for wind-only policies would increase from 5% to 15%.  The other change is a mandatory switch from a fixed deductible amount (for example, $500 or $1000) to a 2% (of the insured value of the structure) deductible.  For a $175,000 policy, this deductible would increase to $3,500.  This deductible change will likely result in a slight savings on insurance premiums, and will somewhat offset the surcharge increases.  The third change, which affects all private market policies and the Beach Plan, is a 17.5% increase in insurance premiums that was approved by the Commissioner of Insurance after receiving a larger request from the NC Rate Bureau. 

 

The actual impact of these changes on an individual policy will vary somewhat depending on various discounts in place for a particular policy holder, however, a detailed example calculation completed for a $175,000 policy suggests that the combined impact will be a 20% - 25% increase in premiums for next year.  The various changes are scheduled to take effect at different times over the next few months.

 

A group led by Dare County and the Town of Nags Head has filed several appeals of the changes to the Beach Plan and the rate increase.  Several coastal towns and counties have signed on to this effort and have made contributions to support the effort.  At its January meeting, the Board of Commissioners voted unanimously to support this effort and approved a $5,000 contribution.  The appeals will be considered over the next several weeks.  Additionally, the NC General Assembly is considering this issue and their involvement may lead to different changes.