CHARLOTTE, NC (WBTV) - A month into the hurricane season concerns are being raised over North Carolina's insurance fund that protects property along the beach. It could go under. So why should you care? Because even if you don't own a home on the beach -- you could get stuck with the bill.
North Carolina is ranked fourth among hurricane states.. after Florida, Texas, and Louisiana.
We've seen our share of big storms to hit the coast over the years.. costing billions of dollars in damages.
But should a catastrophic storm strike.. .there's not enough money in a state insurance fund to cover all the costs to rebuild. The state may be coming to you.
On the surface it defies logic. potentially sticking all of us with the bill if there's a catastrophic hurricane to hit the coast.
But before you go out and e-mail your state lawmaker and give them a piece of your mind.. you'll want to see our Cover Story.
This is the one.. the big one.. that North Carolina leaders are so afraid of.
1954's Hurricane Hazel.
The only Category 4 hurricane to hit the North Carolina coast in the 20th Century.. and by most measures the worst.
If another Hazel were to happen..
Or a Hugo.. this is what the satellite pictures looked like..
Or something like Katrina..
A state insurance fund.. that many people along the coast get their insurance through.. known as the Beach Plan.. couldn't possibly cover damages from a catastrophic hurricane.. or a series of mini hits.
Katrina for example cost 45 billion dollars.
The Beach Plan has only about 2 billion in reserve.
So what are state leaders considering doing?
Tagging homeowners statewide with the cost.
Charlottean Mike England.. shares an opinion widely held around here.. even though he has property along the coast as well.
He says, "Why should I pay for someone that wants to live on the coast and to take chances where there are risks or hurricanes or just bad weather?
Were the big one to hit-- insurance companies who do business in North Carolina would have to pay for what the Beach Plan couldn't.
And right now there's nothing in state law that'll let the insurance companies recoup any of that money from their policy holders.
Companies who do business here are threatening to pull out of North Carolina if something's not done.
Farmer's Insurance and Nationwide for example have already quit writing some policies.
It's why the state's under pressure to come up with a plan.
What's being proposed?
If the Beach Plan's payouts surpass 2-point-4 billion dollars.. a bill in the General Assembly would allow every property owners insurance policy to rise.. up to 10-percent.
Experts say there's just a one-percent chance of a catastrophic hurricane like Katrina hitting North Carolina.. so the recoup might not ever happen.
Still it's given rise to critics.
Says AAA Carolinas Tom Crosby, "The people that are undergoing the risk are not paying enough to cover the damages. Consequently it's an unfair Beach Plan operated by the state."
How did the Beach Plan become underfunded?
Insurance companies say the Beach Plan kept its rates too low for too long.. and hasn't stockpiled a surplus.
And-- property at the beach has gone up.
The value of property the plan is now insuring has jumped in five years from 18-billion to now nearly 70-billion dollars.