Insurance premiums ~ Hurricane Katrina still affecting Grand Strand businesses

Skyrocketing insurance premiums are taking their toll on Grand Strand businesses. The effect could be devastating.

Bottom lines will be squeezed and rates next year for such tourist necessities as meals and hotel rooms could be higher as businesses try to recoup their losses.

The Myrtle Beach Area Chamber of Commerce and the Council of Myrtle Beach Organizations plan to take the problem to state legislators.

“Our challenge is to identify the impact to the state’s largest tourism market. There are no easy solutions. If it’s a legislative solution, it will take non-coastal legislators to go along with it,” said Brad Dean, president of the Myrtle Beach Area Chamber of Commerce.

Problems on the bottom line

Hotels can’t pass the increases on to customers because room rates are set for the summer. But, eventually, restaurants to retailers will have to pass those increases on.

And if the rate increases and difficulty in getting coastal insurance doesn’t let up, local business owners are worried it could mean disaster for the Strand economy.

Almost a year later - Hurricane Katrina is being felt in skyrocketing insurance premiums as carriers reduce their exposure in coastal areas. Businesses are finding it’s harder to get coverage, and when they do find it, it’s a lot more expensive.

Cutting back to get by

Some Strand businesses that can’t absorb the extra cost are reducing or eliminating insurance. For those that can get insurance, deductibles are rising and insurers are adding percentage deductibles to shift more of the cost of the claim on the premium holder.

Source: Jenny Burns, The Sun News, Myrtle Beach, SC