You can do the right thing and be part of the solution to allow all statewide consumers to enjoy availability and affordability of property insurance. HB 1305 is important to the long-term health and vitality of the property insurance market in North Carolina.
Why HB 1305 Makes Good Sense for All Property Owners
Being proactive is good for the state of North Carolina.
You know a big storm is coming, it's only a matter of time. Unlike Florida, Alabama, Louisiana, Mississippi and now, Texas where lawmarkers have scrambled after major storms, NC legislators can act now. Legislators can do the right thing and assure claims are paid in the aftermath of a major storms or series of storms, instead of waiting to act, being unprepared and having you suffer the consequences.
Why is being prepared and proactive good for ALL insurance customers?
Insurance companies must predict their expected losses in order to fairly set rates. In NC, company loss potential is the combination of direct customer losses and indirect losses. Indirect losses are assessments from the state residual market (The Beach Plan). Under the current system, indirect losses are unlimited for companies. We are the only state in the nation with this financing arrangement.
If, however, companies know their loss potential, they can price products appropriately and competitively so consumers get the fairest price possible. That is what being prepared and proactive will do for ALL insurance customers in North Carolina.
When companies are unable to predict losses, everyone loses.
With unlimited liability from the Beach Plan, insurance companies take highly variable and different approaches. Some companies simply avoid a particular market. Others exit a market. Still others raise prices to provide for the "unknown." In extreme circumstances, when lossess occur, some companies go bankrupt. This happened in Florida after a series of storms.
Skeptical? Do you know that only 15 companies write 91% of all homeowners policies in the state of North Carolina? And, the top five companies write 64% of all policies.
What happens when a big company leaves our state?
We're going to find out. Last fall, the 9th largest company announced they were leaving.
What happens when other big companies reduce their business in NC?
We're going to find out on this one, too. Two of the top five companies have curtailed their business in the State and many other companies have taken actions as well. The North Carolina property insurance market is in transition. If you don't believe it, just ask our elected Insurance Commissioner what keeps him up at night.
What happens if you go home without acting this year?
We don't want to find out.
But some people don't want to pay for losses on the coast!
Those people don't know the whole story.
THEY DON'T KNOW that the surcharge doesn't happen unless there is a MAJOR catastrophe.
THEY DON'T KNOW the surcharge is temporary.
THEY DON'T KNOW the coastal policyholders pay higher taxes and already pay surcharges.
THEY DON'T KNOW that companies will kick in $1 billion after a MAJOR event.
THEY DON'T KNOW that companies are giving up $750 million today and forgoing any future earnings from the Plan.
THEY DON'T KNOW that we're trying to reduce the size of the Beach Plan.
THEY DON'T KNOW that if HB 1305 works as intended, the Plan will shrink and the likelihood of a surcharge will decrease.
THEY DON'T KNOW that if nothing is done, they might pay two times their premium as a result of losses on the coast after a MAJOR catastrophe.
What should I do?
Please contact your legislator in support of HB 1305!
Please click here for a list of North Carolina Senators
Please click here for a list of North Carolina Representatives