Insurance Hikes Hurting Real Estate Sales

South Carolina needs to find a way to stabilize the insurance market and find an intelligent solution to skyrocketing rates for the future. Real estate agents said they want legislators to research the effects of wind pool expansion, and enact the best solutions to stabilize rates.

Agents raised these concerns.

• Buyers are asking: “”If rates have increased this much, what will they increase this year?”

• First-time buyers can afford today’s softening home prices but can’t buy because the insurance cost puts homes out of their reach.

• Investors might be able to afford the property but can’t make money with the insurance increase, so they’re not buying either.

• Condo owners who want out can’t sell. Even sellers offering free homeowners association dues for a year can’t sell because there are other condos for sale priced $20,000 below the market price.

• Even investors buying with instant equity are leaving.

Wind pool expansion - mixed effect.

• Condo owners could find relief if standard carriers start writing policies, now that they can exclude wind coverage.

• Single-family owners who already have policies might be dropped by a company that no longer wants to cover wind damage.

• With 12,000 coastal residents being dropped by Allstate, and other large carriers following suit, many homeowners are getting dropped anyway - and frantically looking for insurance in a tightening market.

Market improving?

• Market seems to be getting a little better, but rates haven’t dropped significantly.

• Some condo complexes have been able to find new insurance policies for slightly lower prices than the previous 700 percent increases they were hit with, but nothing near 2005 levels.

Source: Jenny Burns, Myrtle Beach, SC