The House considers House Bill 1305, Beach Plan Changes, today for debate and the first of two votes. The debate through committees can be found here and here.
This would provide provisions to “shore up” the government subsidized insurance plan, intended as an insurer of last resort but things have gotten out of hand and the plan now has reserves of about $2 billion but is looking at damages of over $8 billion if a major storm hit the coast. The bill would require insurance companies to pay up to $1 b in damages in case if a catastrophic storm hits the coast, use the surplus in the beach plan and if damages exceed that amount, property owners would pay up to 10 percent in assessments. It would also cap coverage for houses that do not exceed $750.000 – no more million dollar beach houses. This is only a beginning and a stop gap measure through the hurricane season with major changes needed in the plan. Basically the government needs to get out of the property insurance business.
Reps Van Braxton, D Lenoir, and Jerry Dockham, R Davidson, speak in favor of the bill.
Rep Grier Martin, D Wake, asks why residents across the state have to pay. Answer is they don’t until $1 billion in claims have been paid and then could be assessed no more than 10 percent of their premiums.
Rep Pat McElraft, R Carteret, explains the hardships on her constituents on the coast. Says insurance companies are making good profits and should assume more of that risk. She’d like to raise the cap to $2 B before citizens’ rates increase and proposes an amendment. Bill sponsor Hugh Holliman, D Davidson opposes the amendment and says at $1 B, NC is way higher than other states.
Amendment fails 52 – 63.
Vote on the bill 89 – 27. Will be voted on again tomorrow for third reading. And then go over to the Senate.
