North Carolina Coastal Insurance Update: Challenges with Erosion
North Carolina Coastal Insurance Update
In response to the recent structural collapses along North Carolina's coast, Insurance Commissioner Mike Causey outlined the challenges facing homeowners due to shoreline erosion. A severe storm caused multiple unoccupied homes in Buxton to fall into the ocean, sparking numerous inquiries from affected residents and businesses. These events underscore ongoing issues with coastal erosion and its impact on property insurance implications, including regulatory compliance requirements for insurance providers.
The storm, with winds reaching 60 mph, resulted in the destruction of four additional homes, bringing the total to 31 homes lost since 2020. Causey highlighted both the economic and environmental repercussions of these collapses. Debris from the wreckage extends for miles along the coastline, significantly increasing cleanup responsibilities and challenges for risk management by insurance carriers.
Citing local reports, Causey noted that complex jurisdictional challenges between state, federal, and environmental agencies have hindered response measures. Residents are advocating for interventions such as man-made reefs or other structural solutions, despite existing bans. Although beach renourishment projects are implemented in various communities, they impose financial burdens and offer only temporary compliance solutions.
Legislative efforts to address these issues were previously pursued by Commissioner Causey and Governor Josh Stein via the proposed Preventing Environmental Hazards Act of 2025. This bipartisan bill aims to amend the National Flood Insurance Program (NFIP) provisions to allow payments for preemptive demolition or relocation of properties threatened by erosion, prior to collapse. Currently, standard homeowner’s insurance does not cover damages resulting from shoreline erosion, leaving property owners financially vulnerable. The bill is still pending in the House Committee on Financial Services.
Additionally, Causey acknowledged the need for considering local perspectives and expediting policy solutions to address these imminent risks. Concurrent efforts aim to secure federal disaster recovery funds, such as the $13.5 billion requested for Hurricane Helene relief, highlighting the state's commitment to addressing current and future weather challenges through comprehensive underwriting and risk management strategies.