South Carolina: A Model of Success
South Carolina has a competitive homeowners insurance market. In 2007, lawmakers in the state implemented a market-oriented approach to homeowners insurance that encouraged competition among insurers; bolstered the business climate in South Carolina; and afforded greater consumer benefit. South Carolina now offers more options for consumers, better products and services, and lower costs for policyholders.
Rates should Reflect Reality: We Have More to Lose
Risk must measure a combination of frequency (how often losses are expected to occur) and severity (the cost of claims). South Carolina has a history of catastrophic storms, including hurricanes, that cost insurers decades worth of premiums. Historically, catastrophic storms have caused more damage in coastal communities.
Rates factor increased costs in repairing and rebuilding homes. While other coastal states may have had more recent hurricane activity, South Carolina has a greater percentage of the state’s property value in harm’s way along the coast (28% vs. 9% in NC and 5% in GA). Moreover, average claims are getting more expensive. Claim severity in South Carolina has risen 155% over the past 15 years.
While the much of the focus in recent years has been on hurricane activity on the East Coast, insurance companies pay claims covered under their policies on a daily basis. (In fact, even in years when there is no hurricane activity, insurance companies pay homeowners millions of dollars in claims.)
Premium Reduction: Tools for Homeowners
Stronger buildings help reduce loss of life and damage to communities. When homes and businesses are stronger and more damage-resistant, both homeowners and insurance companies take on less risk and insurers pass savings along to their customers.
Grants offered by federal and state governments to homeowners and communities can help property owners pay for simple building improvements which reduce storm damage and result in lower insurance rates.
• Consider increasing your deductible. The higher your deductible, the lower your premium will be. Also, look into your eligibility for discounts. Many carriers offer discounts and premium credits for consumers who combine their home and auto coverage with the same company, for example, or retrofit their home to make it more disaster-resistant.
• Prices vary from company to company, so it pays for customers to shop around. The SC Department of Insurance offers market assistance that helps provide comparisons of prices and coverages offered by licensed insurers.
• South Carolina offers tax-free Catastrophe Savings Accounts that help homeowners save money to cover their deductibles in the event of a loss.
For more information, contact the South Carolina Insurance News Service at 803-252-3455 or use our contact form.