The South Carolina Safe Home Program: Home Insurance Availability For Coastal Residents

A crisis exists for coastal South Carolina homeowners. State underwriters offering home insurance either stopped offering home insurance or made new policies prohibitively expensive for South Carolina homeowners in Horry, Georgetown and Charleston counties. To some degree the same pinch has been felt in Beaufort County. In 2007 the South Carolina General Assembly passed the Omnibus Coastal Property Insurance Act that allows coastal home insurance policy holders to create a catastrophe savings account and to allow tax credits for money deposited into such an account. The move was in response to South Carolina insurance companies declining to write new home insurance policies along the coast.

Home insurance availability for South Carolina coastal residents

The new law also provides a premium tax credit for licensed South Carolina insurance companies who write full home insurance property and casualty coverage that includes wind and hail coverage in areas eligible for coverage through the "Wind Pool." The purpose of the new law is to encourage insurers to write more business in the coastal areas of South Carolina. The new law also holds that coastal homeowners in Horry, Georgetown and Charleston counties can claim a state tax credit if they are paying an -excessive” home insurance premium as defined by the new law. The Act also has mandated the creation of a South Carolina Coastal Captive insurance company to write home insurance for coastal residents who cannot obtain it through other private home insurance underwriters.

The SC Safe Home program was created by the Omnibus Coastal Property Insurance Act with the goal of assisting eligible South Carolina property owners with the retrofitting of their homes to make them more resistant to losses from hurricane damage. The Safe Home Program also helps coastal South Carolina homeowners take a state tax credit for any expenses incurred in retrofitting their homes to make them resistant to hurricane and severe weather damage. The South Carolina Department of Insurance also has the authority to provide exceptions to home insurance rates it deems -excessive, inadequate or unfairly discriminatory.” Finally, the Omnibus Coastal Property Insurance Act holds that South Carolina home insurance companies cannot cancel home insurance policies for coastal policy holders because of the perceived greater threat of hurricane damage there.

Coastal home insurance situation

The home insurance situation on South Carolina’s coast has arisen due to three key factors: the rapid growth and development of residences along the coast that require home insurance; the belief by South Carolina insurance companies that the state is heading into a 15-20 period where the potential for more severe weather and hurricane activity is great and the fact that South Carolina home insurance companies lost four cents for every one dollar of premiums they gathered in South Carolina from 1985 to 2005.

Recent figures show that over 26% of the $581 billion worth of property insured in South Carolina is located in hurricane prone areas along the coast. The values of homes in Charleston, Berkeley and Dorchester Counties alone have increased 120% between 1996-2005.

South Carolina coastal homeowners will now have some additional measures by which to obtain affordable home insurance in the future.