The increases that coastal property owners have experienced are attributable to the cost of reinsurance and the cost of reinsurance is attributable, in part, by rating agency actions.
Rating agencies rate the financial strength of insurers. For example, an insurance company with an A++ rating may be classified as "superior" and an insurance company with an A- rating may be classified as "very good." Ratings are important to both consumers and insurers. Consumers benefit from these ratings because they are assured that their claims will be paid. Additionally, insurers with better ratings receive better credit terms than insurers with lower ratings.
Based on the current weather predictions and catastrophe model estimates, rating agencies have increased the capital requirements for insurers writing coastal property insurance. Prior to 2005, insurers generally were required by rating agencies to have sufficient capital to pay claims associated with one 100-year storm (a storm that has a 1% chance of happening in any given year). After 2005 and the realization that multiple major hurricanes could strike the same or nearby areas, rating agencies doubled their capital requirements.
As a result of rating agency actions, insurers have sought to purchase additional reinsurance. Reinsurers, which are subject to the same rating agency actions, cannot write as much business as before and/or they must charge higher premiums to insurers because of the increased demand for their product. Just as rating agencies were requiring insurers to purchase more reinsurance, they were requiring reinsurers to sell less at a higher price. These increased reinsurance costs are ultimately passed along to consumers, like your constituent.
The Department recommends that all consumers shop around to see if there is another carrier with a more competitive rate. Additionally, the Department encourages consumers to take advantage of the reforms set forth in the Omnibus Coastal Property Insurance Reform Act of 2007. For example, insurers are required to offer premium discounts for mitigation measures on policies effective on or after January 1, 2008. Also, tax credits are available for costs incurred in making your home more wind resistant as well as for supplies purchased to retrofit your property.
The Omnibus Coastal Property Insurance Reform Act of 2007 established a grant program for homeowners to help them strengthen their property and make it more resistant to the high winds associated with hurricanes and severe wind storms. Please visit http://www.scsafehome.com/ for more information about the program. Finally, consumers may want to consider setting up a tax free Catastrophe Savings Account to cover the cost of their deductible.
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- Public Hearing: June 12, 2008
The South Carolina Department of Insurance will hold a public hearing in accordance with the requirements of Section 38-3-110(7),Thursday, June 12, 2008 from 5:30-7:00 p.m. at The Town of Mount Pleasant Municipal Chambers. The purpose of this hearing is to provide an opportunity to discuss and offer input concerning the status of the coastal insurance market. The Municipal Chambers are located at the Town of Mount Pleasant Municipal Complex 100 Ann Edwards Lane, Mount Pleasant, SC 29464.
- Coastal Insurance Forum: April 10, 2008 [pdf 17k]
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Institute for Business & Home Safety
The Institute for Business & Home Safety’s mission is to reduce the social and economic effects of natural disasters and other property losses by conducting research and advocating improved construction, maintenance and preparation practices.
SC Department of Insurance - Office of Consumer Services
The Office of Consumer Services provides assistance to consumers on a wide range of insurance claims and policy issues. They will be happy to respond to consumer needs relating to homeowners and coastal insurance; provides consumers with market assistance by helping to locate hard-to-place insurance coverages within the insurance market; and assists consumers following a catastrophic event.
SC Emergency Preparedness
The SC Emergency Preparedness Office provides information about South Carolina Emergency Operations Plan, Hurricane Plan, Earthquake Plan and selected other natural hazard plans.
SC Insurance News Service
The SC Insurance News Service is a non-profit, non-lobbying organization which provides property and casualty insurance information to consumers and the media.
SC Safe Home Grant Program
The SC Safe Home program was created by the Omnibus Coastal Property Insurance Act of 2007. The goal of the program is to assist eligible South Carolina property owners with the retrofitting of their homes to make them more resistant to losses from hurricane damage.
SC Wind and Hail Joint Underwriting Association
The SC Wind and Hail Joint Underwriting Association (SCWHUA) is the residual property insurance market in South Carolina. It provides coverage for the perils of wind and hail in the coastal areas of the state designated by the Legislature as "Beach."
The Federal Alliance for Safe Homes - FLASH, Inc.
FLASH is a non-profit, 501(c)3 organization dedicated to promoting disaster safety and property loss mitigation. Their mission is to promote life safety, property protection and economic well-being by strengthening homes and safeguarding families from natural and manmade disasters.
Our online search tool for insurance companies allows consumers to find information about insurance companies licensed to do business in South Carolina, including contact information, licensed producers, types of insurance offered and complaint history.
To find information about an insurance company doing business in South Carolina, please follow the instructions below.
- After reviewing the list of insurers in the Market Share Report, select the company of your choice and write down the 6-digit company code number.
- Click "Search for Insurance Companies."
- Type the 6-digit code into the South Carolina company code field and then click search.
- When the result appears, click on the company's name to view demographics and license information.
- To view the company's complaint summaries and search by city for producers appointed by the company, click on the identified link on the right side of the page.
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Company Claims Phone and Fax Numbers [pdf 20k]
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Consumer Complaint Form [pdf 26k]
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Phone: 803-737-6180
Toll-Free: 800-768-3467 (Accessible only in SC)
Email: consumers@doi.sc.gov
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