SC - Homeowners See Insurance Rates Soar As Options Shrink
Coastal areas in South Carolina have long been prized for their scenic location and proximity to the ocean, but recent years have witnessed a growing concern among homeowners regarding the availability and affordability of home insurance.
Hurricanes and flooding, fueled by changing climate patterns, have made it harder for homeowners to obtain affordable insurance, forcing many to consider alternative plans or even pull out of their existing policies.
“Our prices have been going up every year for the last 10 years,” local homeowner Jason Salas said. “I’m considering changing plans to a higher deductible based on risk tolerance and personal factors pertaining to my home.”
According to Michael Dew from Daniel Island’s Taylor Agency, this strain is due to the skyrocketing costs of reinsurance – insurance for insurers – aimed at reducing the financial risk in the event of large payouts for claims. As a result, many insurance carriers have opted to cease writing policies in coastal regions, redirecting their focus to more profitable inland areas that are less susceptible to hurricanes and flooding.
Dew points out, “Just about every carrier that I represent has had steep rate increases as well due to these storms and increased cost of reinsurance.” The result is that homeowners are now paying more for their insurance policies, with some experiencing rate hikes as high as 100-150%, Dew noted.
Insurance agencies have also become more selective, considering factors such as roof age, plumbing systems, and even the age of hot water heaters, making qualifying for insurance harder for homeowners. With availability and affordability working in tandem to make it difficult for the consumer, carriers are pumping the brakes and slowing down sales to new homeowners, according to Sam Schirmer of Schirmer Insurance Group.
“Some carriers are non-renewing due to reinsurance issues, some are non-renewing as they want to move further back from the coast,” Schirmer said. “Some carriers are stopping new sales altogether.”
With increased home values and the increase in the cost of natural disasters, the industry has renewed its focus on its strategies to manage its risk in certain areas, especially those prone to coastal catastrophes. Other factors contributing to the rate increases have to do with inflation, higher repair/rebuild costs, and rising labor and material costs.
Russ Dubinsky, executive director of the South Carolina Insurance Association, notes that the silver lining in South Carolina is that companies are still willing to ensure those risks and there are more companies entering the market today.
The South Carolina Department of Insurance (SCDI) has also taken steps to support homeowners facing increased insurance costs and risks. The South Carolina Safe Home program offers matching and non-matching grant funds to help coastal property owners retrofit their homes, making them more resistant to hurricanes and high-wind damage.
