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Coastal living costs

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To the editor:
Last week, a contributor to this page made a number of flawed assertions about homeowners’ rates characterized as “facts.”
Our primary catastrophic exposure in coastal North Carolina is the winds, rain, wave wash and floods (often an excluded peril) associated with tropical storms and hurricanes. Take little comfort if there has not been a significant weather event in years—it will occur. Local government, insurance companies and homeowners plan for that eventuality.
The mention of real estate market value is of little relevance to the question of your homeowner’s cost. If adequately insured to replacement cost value, your covered loss will be the cost of repairing or constructing your home.
The assertion that recent increases in the stock market benefit property and casualty insurers is completely off base. As a regulated industry, investment practices are very conservative and heavily balanced toward treasuries, government bonds and other investment vehicles with low returns and high protection of capital.
I can’t comment on the adequacy of a 20 percent homeowner rate increase. It may be too low or too high—I don’t know.
North Carolina Insurance Commissioner Wayne Goodwin is an elected official. In most states, including neighboring South Carolina, the commissioner is appointed by the governor. To suggest the commissioner is a “joke at our expense” is something you can change at the next election.
The social engineering of government policy spends taxpayer money in coastal communities to protect beaches from erosion, as an example, and with subsidized flood insurance because so many of us make the choice to live close to the ocean. This does not mean those living in Asheville should subsidize these costs.
Ultimately, there will be political compromises to resolve the issue. Various stakeholders, including N.C. consumers and groups with the most political clout, will more than likely prevail. The N.C. legislature is now looking at a number of bills related to this issue; HB 519 and SB 690 are two of those bills.
Charles McShane
Columbus, Ohio