Insurers Say Major North Carolina Storm Could Cost Billions

July 23, 2008

Insurance companies say a major hurricane could lead them to pass billions of dollars in charges to homeowners across North Carolina because a state-created coastal insurance plan is underfunded.

The News & Observer of Raleigh reports that North Carolina's Beach Plan could handle about $2.5 billion in losses, but a major storm could lead to billions more in damages.

Bob Herlong, vice president of the Property Casualty Insurers Association of America, said additional losses would be assessed to insurance companies, leading smaller ones to bankruptcy and burdening others.

Herlong said that even if it took years, companies would seek rate increases -- perhaps statewide -- to recoup those losses.

Industry officials are meeting to discuss coastal insurance at a seminar at Appalachian State University which started on July 21.

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Information from: The News & Observer,
http://www.newsobserver.com