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Editor's note: This article has been corrected to reflect that Nationwide no longer writes insurance policies for mobile homes in North Carolina.

RALEIGH — Plans to cope with a storm that causes havoc along the coast could leave insurers and homeowners across the state — even those from inland communities such as Greensboro — between a rock and a hard place.

The rock: North Carolina’s current system for insuring coastal homes is driving insurers out of state, potentially making insurance more expensive and harder to find.

The hard place: Plans to make sure coastal problems don’t get out of hand could end up costing property owners who live nowhere near the coast extra premiums in the event of a disaster.

Caught in between: Companies such as Greensboro-based Alliance Mutual Insurance Co., which has 20,000 customers in the state and could find itself under water either way.

“The smaller the company, the more likely it is they could be driven out of business,” said Bob White, president and CEO of Alliance Mutual. His company insures a fraction of 1 percent of all the claims that could be paid.

Getting a home or business insured along North Carolina’s coast can be expensive. When a property owner can’t get a policy from a private company they can participate in the state’s Beach Plan, a “market of last resort.”

But insurers fear a massive hurricane or series of big storms could deplete the plan’s reserve. In that case, each company that does business in the state would be asked to pay a share of the losses based on how much business it does here.

“We can’t predict what our portion of the loss might be,” White said.

That unpredictable liability could cause problems even for those who don’t live near the beach.

Last year, Farmers Insurance announced it would no longer write homeowner’s policies in North Carolina. Company officials confirmed this week that it was because of the open-end liability from the Beach Plan.

Nationwide, which is still writing policies in the state, said it will no longer insure mobile homes here.

“What we’re trying to do is take prudent action on the items that we can control,” said company spokesman Joe Case.

With fewer companies willing to write policies, homeowners could see their premiums go up even if they live nowhere near the beach.

To prevent what Insurance Commissioner Wayne Goodwin described as “a homeowners insurance availability crisis across North Carolina,” a House committee has begun writing a law to restructure the Beach Plan.

The legislation would remake the plan from the ground up, changing everything from how annual surpluses are handled to its name. It is complex and deals with much more than recouping losses in the event of a major storm. However, the part most relevant to inland homeowners is a proposed limit on the amount insurers would have to repay the Beach Plan in the event of a catastrophe.

If the plan’s reserves were wiped out, insurers would be on the hook for at least $1 billion. After that, insurers could add a surcharge to every homeowner’s policy. That surcharge could be up to 10 percent of the homeowner’s annual policy cost per year and it could last until the losses were recouped.

Nationwide officials said they thought the average surcharge in such an event would be $60 per year.

But White of Alliance Mutual said that new buffer may not be enough for companies like his.

“It creates a huge cost to us that we then would have to pass on to our policy holders,” he said. “It’s really a double-whammy for policy holders across the board.”

White said he would like to see the cap insurers would have to pay on their own lowered below $1 billion.

Other things could also be done to encourage people at the coast to incur less risk and to encourage private companies to write more coverage.

“We want a bill where the surcharge only happens in the worst-case scenario,” said Rep. Hugh Holliman, a Lexington Democrat. His committee is due to keep working on the matter in the coming weeks, he said.

Contact Mark Binker at (919) 832-5549 or mark.binker@news-record.com