By Meghan Cooke
mcooke@salisburypost.com
N.C. Insurance Commissioner Wayne Goodwin praised the General Assembly’s passage of a revised Beach Plan, which would limit insurance companies’ liability.
“I believe it defuses a ticking time bomb,” Goodwin said. “Had this bill not passed, we would have seen a greater exodus of insurance companies from this state.”
Goodwin spoke to a crowd of about 75 insurance agents at a seminar held by Professional Insurance Agents of North Carolina at the Holiday Inn on Jake Alexander Boulevard South.
Jim Kennedy, executive vice president of PIANC, said the organization serves as an advocate for insurance consumers and insurance agents on matters of state and federal legislation.
“We work to keep insurance rates reasonable and affordable,” he said.
Goodwin spoke at length about coastal insurance reform and House Bill 1305, which is more commonly known as the Beach Plan.
“It’s important, now more than ever, for North Carolinians to have insurance,” Goodwin said, noting the state of the economy.
The original Beach Plan was adopted to promote economic development in eastern North Carolina and to ensure that coastal residents could get insurance for their homes.
But since that plan was put into place, the program has not been adjusted to handle increasing property values at the coast, Goodwin explained.
With no cap on their liability, some insurance companies decided coastal insurance wasn’t worth the risk, he said.
Goodwin said that if less insurance companies provided services in the state, the availability of insurance would decrease, which in turn would increase the cost of insurance for consumers.
Calls for a revised beach plan followed skyrocketing coastal insurance rates. The new plan caps insurance companies’ liability to $1 billion.
But should private claims exceed $1 billion following a devastating hurricane, homeowners across the state would be tapped to foot the bill.
The bill passed both the N.C. House and Senate before the General Assembly’s session ended this month, but it has not yet been signed by Gov. Beverly Perdue.
Jay Whittington, president of Central Carolina Insurance Agency, said the beach plan is critical for the entire state.
“If more companies withdrew, it would have been chaos,” Whittington said.
The beach plan allows for competition among insurance agencies, which keeps prices low, he said.
“There’s nothing wrong with good competition.”