As the coastal regions grapple with the ongoing impact of hurricane threats, this development carries significant implications for affected policyholders.
The tally of policies to be left unrenewed stands at a striking 10,525, reflecting the insurer’s commitment to addressing the escalating hurricane risk profile in the region. This measure, outlined in response to the evolving risk landscape, is predicted to affect approximately 4.4% of Nationwide’s extensive policyholder base in the state, totaling 237,652 policies. On a national scale, this equates to 1.7% of the insurer’s expansive 621,705 policies, as detailed in an extensive report published by the respected local newspaper, The Virginian Pilot.
While the ramifications of this decision are far-reaching, it is worth noting that the lion’s share of non-renewals is concentrated in the eastern part of the state, where the hurricane threat looms particularly large. Astonishingly, this move will have a direct impact on more than 1,000 policyholders residing in the picturesque Outer Banks region, known for its scenic beauty but also its vulnerability to coastal storms.
According to Jason Tyson, communications director for the North Carolina Department of Insurance (NCDOI), 5,781 policies were not renewed based on a “hurricane hazard assessment tool,” while 4,744 policies will be referred to the North Carolina Insurance Underwriting Association, commonly known as the Beach Plan.
Nationwide had notified the NCDOI of its decision in February 2023, Tyson told the Virginian Pilot, citing the need to reassess and rebalance its portfolio based on risk factors such as climate severity, weather-related losses, and changes in the reinsurance market.
Tyson said that the non-renewals might have the opportunity to be rewritten with the insurer “if wind exposure is ceded to the North Carolina Insurance Underwriting Association and if current underwriting guidelines are met.”
However, this alternative may not be accessible for residents on the Outer Banks, as insurance agent Scott Weatherly pointed out. Nationwide has not underwritten any new homeowners’ policies for the barrier islands in nearly a decade.
As co-owner of Weatherly Insurance Agency, Weatherly informed The Virginian Pilot that Nationwide will maintain active policies without wind and hail coverage. However, policies with wind and hail coverage will not be renewed.
The ripple effect of these non-renewals extends well beyond the borders of North Carolina. According to Weatherly, it impacts over 100,000 homes spanning from Texas to the Northeast, with more than 9,000 homes situated along North Carolina’s coastline.
Nationwide initially disclosed its decision in April, with the commencement of non-renewals in July, as relayed by Weatherly. Clients holding policies set for renewal between December and July 2024 may still be awaiting official notification of this significant change.
In a statement released by Nationwide, the company affirmed its commitment to achieving “long-term growth” despite the challenges posed by inflation and market disruptions in the insurance sector. The company outlined its intentions to implement rate adjustments and adopt a more discerning approach regarding the types of coverage it is willing to underwrite.
According to reports, the statement said that Nationwide, like other players in the insurance industry, is taking essential measures to secure its long-term sustainability. These measures are aimed at enabling Nationwide to offer competitive protection to a diverse range of customers across its various business lines, each with unique and evolving needs.
