S.C. wind pool rates rise 35%

Rates for the South Carolina Wind and Hail Underwriting Association went up an overall 35 percent beginning July 19 under an approval from Scott H. Richardson, director of the South Carolina Department of Insurance.

In granting the increase, Richardson noted that loss data initially supported an overall increase of more than excess of 65 percent, but that improvements in the plan of operation and updates to the underwriting rules by the wind pool board reduced the rate request to an overall 35 percent.

He said rates will be reviewed every six months as required by the law.

The pool now employs “two-tiered” rating plan to reflect proximity to the coast to ensure that the rates charged reflect the risk of the property.

In addition, minimum deductibles have been upped to three percent in tier one and two percent in tier two, according to the plan.

Underwriting standards have been changed as well, including requiring a national flood insurance policy for those choosing replacement cost coverages, effective Jan. 1, 2008; rating all townhouses as dwellings regardless of the number of units in a structure; and rating condominium associations consisting of only one or two units as “dwelling” not “commercial.”

He said the new deductibles and rates should strengthen the pool’s operation and reduce the “probable maximum loss” expectations, which should in turn allow the wind pool to get a better reinsurance program.

“It is our feeling that these changes will reduce the risk of any future assessments to both the South Carolina insurance marketplace and consumers,” Richardson said.