Coastal homeowners have long lived in fear that a big storm could force them from their seaside sanctuaries. Now some are starting to fear the fear itself — manifested by insurance rate hikes of almost 30% and a major insurer pulling out of the market. “We had taxpayers calling us saying, ‘We’re not going to be able to live here anymore with this going on,’” Dare County Manager Robert Outten says.
Worries persist despite the legislature’s overhaul of a state-backed insurance plan for high-risk coastal properties — commonly called the Beach Plan — in which companies pool assets and share risk, profits and losses. It was intended to be an insurer of last resort, but its low rates have made it increasingly popular. A legislative committee last year said the plan, now called the Coastal Property Insurance Pool, didn’t have enough money to cover potential losses. Prodded by warnings that fear of those losses might cause insurance companies to leave the state, the legislature last August capped potential costs to insurers and put every property owner in the state on the hook for a disastrous hurricane season. Seven days after the law passed, AAA Carolinas announced that it would begin offering homeowner insurance throughout North Carolina. Not everyone was convinced. Bloomington, Ill.-based State Farm Insurance Cos. announced in January that it would not renew policies on homes on North Carolina’s barrier islands after May 1. Spokesman Russ Dubisky says the company, which claims 19% of the homeowner market in the state, worried about losses from major hurricanes.
State Farm’s decision was a “step in the wrong direction” that could force more property owners into the state-run pool, says Tyler Newman, government affairs director for the Business Alliance for a Sound Economy. The Wilmington-based nonprofit had worked with companies on ways to encourage more coverage in North Carolina. Newman wouldn’t speculate on whether other insurers might follow State Farm’s lead.
Meanwhile, coastal homeowners who can still get private coverage find it more expensive than before. Dare, along with several other counties and cities, asked a three-judge panel in January to overturn a rate agreement between the state and the insurance companies. Rates went up just 4% statewide last May, but there’s a huge disparity between those along the coast and the western part of the state — where rates fell in many counties — mainly because of the variation in risk. High rates are hurting not just beach dwellers, Outten says, but people living on less-expensive inland property in places such as rural Perquimans County. “If you can’t live in Perquimans County, something is wrong.”
Poke parks port
An errant forklift punctured containers filled with hazardous material, shutting down the state port at Morehead City for the better part of three days in mid-January, prompting widespread evacuation and pushing state and federal officials to review how such materials are handled. No one was injured after the spill of pentaerythritol tetranitrate, an ingredient in detonating cords for industrial blasting and military devices. The chemical was shipped by Spanish explosives manufacturer Maxam UEB. Cleanup crews later discovered other containers dented in shipping. The salvageable PETN was trucked to final destinations in Arkansas, West Virginia and Michigan. The cost of the shutdown to the port and private companies had not been determined a month later.HALIFAX — Beaverton, Ore.-based Reser’s Fine Foods, which makes salads, dips and other products, plans to spend $60 million to expand its local factory and add 500 jobs within five years. That will give it a total of about 900.