State Farm Dropping Coverage for Barrier Islands
By Catherine M. Welch
Wilmington, NC – State Farm is dropping coverage for homeowners on North Carolina's barrier islands.
The insurance company says notices will go out to its roughly 1,600 customers this spring, alerting homeowners that policies expiring after May 1st will no longer be renewed.
North Carolina Department of Insurance Spokesperson Kristen Milam says State Farm warned the state about this last Friday.
"Well it is disappointing to hear this news, we were hoping that North Carolinians, especially those along the coast and on barrier islands would have more companies to chose from rather than fewer."
Milam says homeowners dropped by State Farm can turn the state's so-called "Beach Plan" that takes on properties not covered by private insurance.
State Farm alerted Texas insurance officials last week that it's dropping homeowner coverage for property on the waterfront and barrier islands. The insurance company says it hasn't covered homes on South Carolina's barrier islands for nearly five years.
Statement By Wilmington-Cape Fear Home Builders Association
The intent during the legislative session was to shore up the finances of the Beach Plan, in order to encourage the private market to return to writing wind policies and to reduce the risk so more companies will come into NC to write polices for all NC citizens. We accomplished the task of shoring up the Beach Plan, and saved citizens money on their deductibles and surcharges in the process.
This recent action by State Farm is a step in the wrong direction. Now one of the larger carriers is pulling out of the homeowners market altogether on NC's barrier islands.
Effectively, this is putting 1600 full policies into a situation where the only probable option is the Beach Plan/Coastal Property Insurance Pool. And in some cases, these homes will see significant increases by having to get additional coverage through non-admitted carriers such as Lloyds of London, etc.
We need to follow through with the provision from the legislation passed this Session which would enable a committee to conduct a comprehensive review of insurance policy in North Carolina.
Do you have insight or expertise on this topic? Please email us, we'd like to hear from you. firstname.lastname@example.org.