Farmers shuts down Homeowners in NC

Posted by Benji Riggins on February 1, 2009 under Insurance News, Office News | Be the First to Comment

Effective December 1, 2008, Farmers will be non-renewing existing homeowners policies in North Carolina as well as no longer accepting new homeowners business starting September 15, 2008.  This change will not effect any other lines of insurance Farmers currently writes in the state.

North Carolina offers three plans -Fair, Beach, and Coastal- for properties not acceptable in the standard market as a result of claims, credit, or condition issues.  If losses exceed the financial capability of the plans, insurers are assessed based on the percentage of homeowners business they have in the state.  The Beach/Coastal plans have been growing rapidly and are considerably under funded at this time.

Although I’m sure Farmers regrets having to non-renew homeowners customers, the current hurricane assessment process has forced them to make this difficult business decision.

Since Farmers decision, other carriers have followed their lead and either started the process of non-renewing exisiting customers or discontinued the writing of new business in North Carolina.

Although the foundation of insurance is the sharing of risk over a large group, I fear the residents of North Carolina not located on the coast are being or will soon be paying a premium for their home insurance that includes the risk only the coastal properties are faced with.

I encourage you to voice your opinion to the state legislature, as they will make the final decision on how this matter will eventually play out.

Benji Riggins