Cost of wind, hail coverage soaring
Mt. Pleasant homeowners caught by 2007 changes
MOUNT PLEASANT — Sticker shock hit Town Councilman Joe Bustos recently when he opened the bill for his homeowner's insurance. It nearly doubled, and he said the reason is changes that the state Department of Insurance made last year that put the location of his home in the expanded "wind pool."
Joe Bustos
The idea of expanding the area covered by the state Wind and Hail Underwriting Association to all of the town east of U.S. Highway 17 was to make wind and hail insurance more available. Bustos said that has happened, but at the same time consumers are being driven into the more expensive "wind pool" coverage.
Last year, Bustos had homeowner's coverage through Armed Forces Insurance for $1,100, of which $700 was for wind and hail coverage. The new policy is $2,100, including $1,700 for wind and hail insurance through the wind pool.
The wind and hail pool consists of insurance companies offering wind and hail coverage to people and businesses in the coastal area who are not able to buy it through the standard insurance market, according to the state Department of Insurance Web site.
Bustos said he's not sure what can be done about the situation, but he has fielded complaints about it. The situation has consequences for those selling homes because the word is out among some Realtors that wind and hail insurance east of U.S. 17 is more expensive, he said. "It's political. I can't believe storm-force winds recognize Highway 17 and stop," he said.
Sue Davis, a Realtor for Keller Williams Realty, said in an e-mail to Bustos, "There is anecdotal evidence that homebuyers and agents are quite aware of the differences in insurance, and it is affecting sales for some of our town residents."
Davis said in an interview that east of U.S. 17 is now considered "the wrong side" of the road among some Realtors because of the insurance situation.
Bustos said some insurers are abandoning wind and hail customers and telling them to get that coverage through the "wind pool," which is very expensive. He said the wind pool was intended to be a last resort for people unable to get insurance. "It (wind pool) has become something now that I don't think it was ever intended to be. This wind pool has taken all the competition out of the system," he said.
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"Being included in the expanded wind pool has turned out to be a disaster for us," said Nancy Baker of Simmons Street. Her coverage for wind and hail will be dropped Dec. 21 unless she purchases wind pool coverage for an additional $2,000, she said in a Sept. 3 letter to Town Council. She did not respond to an e-mail seeking comment.
Smitty Harrison, executive director of the Wind and Hail Underwriting Association, said he was not familiar with Bustos' particular situation, but coastal residents in public hearings asked that the wind pool be expanded so they would have affordable homeowners insurance.
Department of Insurance Director Scott Richardson, who could not be reached for comment, expanded the wind pool to include about half of the town east of U.S. Highway 17.
Bustos said he recently spent about an hour on the phone with Richardson expressing his concern about the situation. Richardson's executive order of May 23, 2007, also expanded the area covered by the wind pool in Charleston, Beaufort, Georgetown and Horry counties. Bustos said he planned to contact officials in those areas about the situation.
Harrison said thousands of people in the coastal areas have lost homeowners insurance in the past year. The reason for the wind pool expansion was to protect the consumer and the real estate market.
"It was all based on consumer complaints. No matter what happens they can get coverage," he said.
Bill Silcox of the C.T. Lowndes & Co. Insurance Agency noted that public input on the issue was gathered during Town Hall hearings more than a year ago. The expanded wind pool has meant more choices for consumers because more companies are selling homeowner's insurance, he said.
The change was billed as a way to provide a new alternative for thousands of property owners caught up in the coastal insurance crisis, with premiums in some extreme cases soaring by as much as 400 percent. In certain areas, insurers dropped coverage completely to reduce their risk near local waters.
The Wind and Hail Underwriting Association was established by state lawmakers in 1971 to provide insurance in hurricane-prone areas where it is generally not available for a reasonable cost from individual carriers. It was considered a last resort for homeowners who can not obtain wind and hail insurance otherwise.
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Comments
Todd_the_Tiger (anonymous) says...
This also DOUBLED our fire premium becase it's "windier." What a load of BS!!!
September 15, 2008 at 10:05 a.m. ( permalink | suggest removal )
wjhamilton3 (anonymous) says...
As the power of Hurricanes and tropical storms continues to increase due to global warming and rising sea levels, I don't see how we can expect insurance not to increase. 12 billion dollars evaporated in Texas last weekend.
Eventually even the US Government has to balance these books somehow. I don't think people in Greenville are going to accept higher insurance premiums so we can live near the water down here.
I don't relish the beating I'm going to take next week when my bill comes. We're at 14 feet elevation on the inland side of 17 with good drainage. That should be enough to avoid flooding based on all the historic experience. No storm in history has ever put salt water on land like that in our part of Mt. Pleasant. Hugo didn't.
I now wonder if I shouldn't have spent more for even higher land. I certianly would do it if I were buying the house today. Nobody should be building anything on land less than 10 feet above sea level.
It's not drill, drill, drill; It's fill, fill, fill. They may not be able to make more land, but they can make it higher. Of course all that drilling means more carbon in the atmosphere, more heat and bigger storms so we had better be filling faster than we are drilling.
The next time you are at the SC Aquarium, take a look at the sea level maps from 30,000 bc and about 10,000 bc. At one time Charleston was about 30 miles inland and earlier it was about 70 miles out in and below the ocean. While most of those changes were natural, we're accellerating the sea level rise some, maybe a lot now.
We probably have about 200 to 500 years before we'll have to abandon most of Mt. Pleasant. The 18 inches of sea leavel rise currently predicted for this century will make some low parts of the Mt. Pleasant uninhabitable without the addition of fill and jacking up houses.
Before Hugo we had houses on Slabs two feet above the Marsh in Hobcaw. I believe those were all torn down and replaced with fill and stilts.
September 15, 2008 at 10:13 a.m. ( permalink | suggest removal )
wjhamilton3 (anonymous) says...
The mandatory evacuation line for some categories of Hurricanes is US 17.
I like going to visit the ocean. I just don't like it when it tries to visit me. I'm as close to the Atlantic as I want to be.
Perhaps this is one of the reasons Daniel Island has been gaining on Mt. Pleasant in business investment. Modern drainage, lots of fill, new, elevated construction.
September 15, 2008 at 10:22 a.m. ( permalink | suggest removal )
MR_PRETTY (anonymous) says...
R,AR,R excuse me there c3po, but isn't tax payers also home owners?
September 15, 2008 at 10:23 a.m. ( permalink | suggest removal )
GermanyXO (anonymous) says...
It's strange to read about how our lawmakers helped expand a unique insurance market that was intended to "protect the consumer and the real estate market." We need to ask ourselves how often our lawmakers negotiate with the Wind and Hail Underwriters Association, insurance industry leaders, and companies providing wind pool coverage. Let's not be surprised if the purpose of expanding the wind pool was to increase the amount these companies were getting in premiums in order to generate the following outcome that's common sense in the insurance industry: premiums are a few percentage points lower for all so that all may apply to benefit from this coverage. Ultimately, we must ask ourselves if we are more willing to pay more as individuals seeking a specific type of coverage, or work with lawmakers and industry to re-write what happens to our homes so that we pay less for specific coverage. As for Mr. Bustos's case, we must encourage him to calculate how much more he'd pay if the wind pool only included real estate East of the Mount Pleasant mainland.
September 15, 2008 at 10:42 a.m. ( permalink | suggest removal )
ashleyatwork (anonymous) says...
Why cant we be like Florida?
Their insurance is CHEAPER than our by half!
I have a 170,000.00 house there and my insurance is 800.00 a year my house here in Summerville's insurance is nearly 2000.00 for the same price house.
September 15, 2008 at 11:05 a.m. ( permalink | suggest removal )
allisondeanlove (anonymous) says...
The wind pool was expanded due to citizens' requests to expand the pool to make insurance more available and the realtors were vocal supporters. In the past year there has been a lot of good news for homeowners:
1. There are many new insurance companies in South Carolina. The increased competition and additional choices are certainly helpful for consumers.
2. Some companies include wind coverage with the homeowner's policy and costs have come down.
3. Omnibus Coastal Property Insurance Reform Act of 2007 with many provisions to save money through discounts and tax credits for making their homes more disaster resistant, set up tax-free catastrophe savings accounts and obtain grants through SC SAFE HOME. For more information on coastal homeowners insurance, the new law and ways to save money, link to SC Insurance News Service at www.scinsnews.com.
Homeowners should talk to their agents and shop around. Here is a link back to the Post & Courier story from May 14, 2008 about some of the new companies: http://www.charleston.net/news/2008/m...
The Post & Courier has written many stories about the wind pool expansion over the past two years. Nancy Baker, quoted in today's story, was quoted in one of those stories in November 2006 as being a proponent of the expansion.
South Carolina now has nearly $200 billion in insured coastal property. With the recent scare of Hanna and witnessing the destruction of Gustav and Ike, homeowners need to make sure they are properly insured. With all the changes in the market, we now have options we did not have more than a year ago. We really hope homeowners will shop around and take advantage of the new law!
Allison Dean Love, Executive Director, SC Insurance News Service
September 15, 2008 at 11:06 a.m. ( permalink | suggest removal )
bigwhip (anonymous) says...
Mr. Hamilton has been drinking the kool aid.....global warming? I believe the level of our oceans have been changing for unknown centuries prior to man's impact on global climate.
September 15, 2008 at 12:11 p.m. ( permalink | suggest removal )
mkris (anonymous) says...
Allison Dean Love, Executive Director, SC Insurance News Service has drunk the KOOL-AID.
The way to get prices down is to make an all or nothing rule for the insurance companies! Want to write Auto, homeowner, life, disability for the state? Then write the whole state or write none of it and yank thier ability to do business in the state. Then watch the problem evaporate. They are not going to give up profitable lines for a few unprofitable ones.
September 15, 2008 at 12:32 p.m. ( permalink | suggest removal )
bribetaker (anonymous) says...
Thank you for your reply, Ms. Love. Since you seem to be lurking, let me offer my insight. It's pretty simple really.
Yes, in this country, in our system of business, more competition is a good thing. It's a good thing because it typically reduces prices to the consumer. What we (the consumer) are seeing is that the wind and hail coverage is NOT following this model. While you and others tout more companies providing coverate, at the end of the day, what we are seeing is not lower prices to consumers but higher prices. That is the bottom line to me and I'm guessing, to most of my fellow residents here in the lowcountry. All the other discussion about choices, # of companies, data, figures, etc. is just blah, blah, blah. It's a smoke screen.......the price for wind and hail insurance has gone up, not down, therefore, what you thought would happen, didn't. So stop going down that path...it's the wrong one, change directions.....i.e. change/modify the decision. When you're in a hole, stop digging.
That's as simple as I can make it.
September 15, 2008 at 12:35 p.m. ( permalink | suggest removal )
eyfigueroa (anonymous) says...
I dislike wealth envy so I hope no one misconstrues my comments as being such.
Yes, lessened governmental intrusion and increased opportunities for competition can help lower insurance costs.
However I get tired of those who wish to live on the coasts or in low lying areas continue to whine about the increasing costs of insurance. I get tired of my tax dollars going to subsidize those folk who apparently can afford to live on the water but not enough to maintain and/or insure said properties.
It's pretty darn simple folks!
Don't build where you can't afford to insure!
September 15, 2008 at 1:35 p.m. ( permalink | suggest removal )
mkris (anonymous) says...
What you don't seem to get is the Insurance Companies asked the State Legislature and the Insurance Department to bend over, and they did. They wanted to cherry pick the lines to write. They threatend to leave the state. The State Blinked.
The state should have told the insurance companies that did not want to write certain lines to leave and take ALL thier lines with them. Bet your bottom dollar the number that would have left would be small if they had to leave all thier Auto, life, low-risk homeowners, disability etc... premiums.
September 15, 2008 at 3:30 p.m. ( permalink | suggest removal )
Don (anonymous) says...
My recently renewed homeowner's policy with State Farm at $2,000 per year was just cancelled by them. They issued a new policy excluding wind and hail for $1,800.
I now have to write a check for the State coverage for $2186.
My insurance has doubled for no increase in coverage.
My home is well inland, close to highway 17 in Mt. Pleasant. We had affordable insurance before the wind pool expansion, but not now. The expansion this far inland is a large mistake. Looking at the expansion map, it appears I'm now included with someone who lives on Goat Island, right on the Intercostal Waterway.
I'm now in FORECLOSURE due to this increasing my mortgage. Thanks for nothing!!
September 15, 2008 at 4:16 p.m. ( permalink | suggest removal )
BillytheKid (anonymous) says...
I bought my home in 1990 and the insurance cost were $336 a year(97,500 in coverage). I now have it insured for $150,000 and I have both the extra cost of wind & Hail and Flood for a cost of $7,700. The home has minor improvements and has a total value of about $300,000. I will not put replacement insurance on my land. My home is up on "stilts" but is 1.3 foot lower than the present code. I is a new code.
Now homeland security is in control of FEMA. My flood has gone from $1,000 to $5,200.
September 15, 2008 at 6:25 p.m. ( permalink | suggest removal )
jsteph10 (anonymous) says...
don, is there a copy of the expansion map somewhere on-line?
September 15, 2008 at 10:01 p.m. ( permalink | suggest removal )
Don (anonymous) says...
Jsteph10.....
Yes, here is a link tp the extension map. Its a PDF file. Click on Charleston - Colleton Counties Territory Map...
http://www.scwind.com/Expansion.asp
September 15, 2008 at 10:32 p.m. ( permalink | suggest removal )
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