Legislation aims to bring about significant changes to the homeowners insurance sector
Major changes could be coming to the homeowners insurance sector in North Carolina. A new legislation, called the Property Insurance Fairness Act, has managed to make its way through the first few steps of the legislative process, making its way through the state’s House of Representatives. Lawmakers supporting the bill are looking for ways to mitigate the impact of what are known as “once in a century storms,” major events that can cause significant damage to properties.
Legislation will allow bonds to be issued to insurers, helping pay for financial deficits caused by natural disasters
The legislation will allow for bonds to be issued in order to assist in paying financial deficits associated with the impact of catastrophic events. The legislation will also require insurers to provide notice when they raise rates on “consent to rate” policies and provide more information to consumers in general. The bonding authority of the legislation is meant to reduce the financial risks that homeowners insurance companies face by doing business in the state.
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North Carolina homeowners are exposed to dangerous disasters
North Carolina is home to more than 300 miles of coastline, and coastal states are notoriously exposed to natural disasters. If a storm is strong enough, it could cause significant damage to coastal properties, but also wreak havoc inland. The legislation could reduce the amount of reinsurance coverage that companies need, making it less expensive for them to do business in the state and, eventually, leading to a reduction in homeowners insurance premiums. Some lawmakers are not convinced that the legislation will accomplish this task, however.
Homeowners insurance coverage continues to grow in expense for consumers
In North Carolina, homeowners insurance companies are looking to raise rates on the coverage that they offer. This is placing more homeowners under financial strain and lawmakers have been looking for ways to reduce this strain to some degree. The legislation has managed to win approval from various committees and is currently up for consideration from the full House of Representatives.