It can be a dreaded topic, along with a symbol of the potential for dreadful, costly weather: wind and hail insurance.
With the region still in the midst of the Atlantic hurricane season (it ends Nov. 30), it’s an issue that comes up more often these days.
“Coastal property owners have been unfairly burdened with high insurance rates. When homebuyers walk in the office with a smile on their faces, excited about the prospect of a new home in the Wilmington area, it sometimes disappears when they hear that home insurance rates are oftentimes double what they are inland. Especially when they hear that they must buy separate wind and hail coverage,” said Neal Johnson, president of Cape Fear Realtors and an owning partner at Network Real Estate in Wilmington.
“The people who already live on the coast are accustomed to high wind insurance rates, and it doesn’t affect the decision too much about buying in the same coastal area they already live,” Johnson added.
A few years ago, Cape Fear Realtors (CFR) worked closely with state Sen. Michael Lee (R-New Hanover) and former Rep. Chris Millis, a Republican who represented Pender County, on companion bills in the House and Senate to remedy many of the issues that exist with homeowners insurance, Johnson said.
“Some issues were resolved, but we’ve still got a lot of work to do relating to rates,” he said. “The N.C. Rate Bureau is expected to release a new request [Nov. 15], so we will be interested to see if its proposal improves the rate situation.”
Meanwhile, “there’s a consistent push to look at the program, look at both the wind pool and the Beach Plan [the name people still use for the Coastal Property Insurance Pool] to make sure that it functions and that it’s financially viable and then also to look at coastal homeowners’ insurance rates and try to push for statewide equity,” said Tyler Newman, president and CEO of business advocacy group Business Alliance for a Sound Economy.
Newman said the local contention is twofold.
“One, there needs to be more shared risk across the state,” he said. “Our rates shouldn’t be three times higher than the piedmont … and then you have to get a separate wind policy … It ends up being an impediment to investment in our coastal community.”
Scott Wheeler and his wife, Michelle, own SFI Group Inc., an independent insurance agency with offices in Surf City, Sneads Ferry and Cape Carteret. The company will also soon have an office in Wilmington.
“If the cost of insurance is going to keep you from buying a house on the coast of North Carolina, there’s other things that should be considered anyway because we all know that the cost of living is different in different areas,” Scott Wheeler said.
He said there was no appreciable increase in the wind rates from 2016 to 2017 from the N.C. Joint Underwriting Association/N.C. Insurance Underwriting Association (NCJUA/ NCIUA). For wind and hail dwelling rental property policies written through NCJUA/NCIUA, rates went up about 20 percent from last year to this year.
It’s difficult to say generically how much a wind and hail insurance policy will cost a homeowner without taking into account exactly where a house is located and other factors, Scott Wheeler said.
In some cases, storms that can bring severe winds and/or hail have done much more damage inland than on the coast of North Carolina.
“Unfortunately, insurance doesn’t always just account solely for historical damage. It also has a predictive modeling section to it, which tries to identify the total degree of anticipated loss in certain-size events,” Scott Wheeler said.
In the meantime, CFR and other groups are keeping an eye on Nov. 15.
“That’s the date we’re all sort of watching to see what happens, and we’ll respond accordingly,” said Shane Johnson, CFO of CFR.
