This editorial appeared in The Charlotte Observer.
A problem with insuring property owners on North Carolina's coast has been building for years, and now it could hit your pocketbook – even if you don't own property anywhere close to the coast.
The situation, in a nutshell: the quasi-governmental insurer of much of that coastal property doesn't have nearly enough money to cover the damage a major hurricane would inflict. Private insurance companies would be forced to cover the difference, so now they want to raise rates across the state, including on those of us hundreds of miles away.
Insurance Commissioner Jim Long, the legislature and the board that oversees that coastal insurance program known as the Beach Plan have all allowed the problem to fester. As multimillion-dollar beachfront homes and condos exploded on the N.C. coast over the past 10 years, they allowed the owners of those homes to enjoy artificially low rates and deductibles, encouraging more such construction. So the value and amount of property covered by the plan skyrocketed while the kitty to pay for damages remained small.
Incoming Insurance Commissioner Wayne Goodwin calls the problem "a ticking time bomb." But it is one created on his protégé's watch. Jim Long has for some time nurtured a reputation as the defender of low rates for the average Joe, but low rates on the coast may now mean higher rates for the rest of us.
To read the complete editorial, visit The Charlotte Observer.