South Carolina Beach Pool Rates Going Up 9.8%
For the first time in four years, South Carolina residents living along the state’s coastline are going to have to pay more for insurance.
The South Carolina Department of Insurance has approved a statewide average 9.8 percent rate increase for the South Carolina Windstorm and Hail Underwriting Association, commonly referred to as the Beach Plan. The plan covers some 47,000 policies representing some $17.3 September 1.
Ann Roberson, spokesperson for the department, said the increase is necessary due to rising reinsurance and rebuilding costs, along with changes in loss projections developed by computer models. ‘It is an increase,” she said. “But that is part of the price we pay for living in a state with coastal exposure.”
Smitty Harrison, executive director for the plan, said the association initially requested a 18.9 percent increase. He said that the plan last saw a rate increase in 2009 when regulators agreed to a 1.58 percent rate hike. “Our goal is to be able and provide a stable market, especially after a catastrophe,” he said.
The Beach Plan was created in 1971 by private insurers as a means to pool the risk from windstorm damage, when state lawmakers mandated that all residents have windstorm coverage. It provides up to $1.3 million residential coverage and $2.5 million in commercial insurance.
In 2007, state lawmakers enacted property reforms that divided the plan into two areas, Zone 1, which encompasses most of the state’s barrier islands, and Zone 2, which includes more inland regions. The change was accompanied by a 35 percent rate increase. Since that time, South Carolina’s property market has shown improvement as 13 new carriers have entered the market.
Harrison said that the plan actually lost policies in Zone 1 as more companies have stepped forward to write policies, including Florida companies looking to diversify their business. “We’ve lost about $2 million in premiums due to companies writing business on our highly-developed barrier islands,” he said.
Surplus lines insurers have also scooped-up many of the high-value homes and commercial risks. Harrison said that 40 percent of the plan’s commercial book of business represented small retailers where the plan only provides contents coverage.