New legislation targeting property insurance has been introduced in North Carolina
Lawmakers in North Carolina are looking to reduce property insurance rates by changing the state’s initiative to cover catastrophic losses caused by natural disasters. A new legislation has been introduce that would establish a public bonding authority, which will be part of the North Carolina Coastal Property Insurance Pool. The legislation would also require insurers to provide information concerning the costs they must bear by providing coverage to coastal properties and how much money they are making from these policies.
Property insurance costs continue to grow for coastal regions
Property insurance coverage for coastal residents and businesses can be significantly expensive. Costs for this type of coverage have been on the rise in recent years, largely due to the losses that some insurers saw in the past due to natural disasters. Some lawmakers believe that the cost of property insurance is too high and are taking steps to address the issue and reduce the financial strain on property owners. Currently this effort has the support of the state’s Insurance Commissioner, Wayne Goodwin, and the North Carolina Association of Realtors.
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Legislation will require insurers to use new risk models when pricing coverage
The legislation would require insurance providers to make use of a state-specific risk model, which is designed to forecast the risks associated with wind damage and other problems that are related to natural disasters. The legislation would also force insurers to base their consent-to-rate process on “sound actuarial principles. The consent-to-rate process has been used to make insurance coverage more expensive, but some have questioned whether the process has been used in an ethical manner or not.
Consumers are concerned over the rapidly growing costs of property insurance coverage
Lawmakers supporting the legislation have noted that the cost of property insurance is one of the most voiced complaints from among their constituents. For some, the cost of insurance coverage is becoming too high, which is threatening to place them in financial distress, especially if they fall victim to a severe natural disaster.