S.C. Insurance proposal ~ hurricane-only to replace wind pool

A group of Charleston independent insurance agents wants to change the state’s wind insurance pool to a hurricane-only coverage that would be expanded inland to Interstate 95 - or the entire state.

They contend the plan would create more competition in the coastal insurance market, stabilize premiums at a fair market price and solve skyrocketing rates hitting South Carolina’s coast.

The main difference between the wind pool, also called the S.C. Wind and Hail Underwriting Association, and the proposed hurricane pool, or S.C. Hurricane Association, would be the hurricane pool would only cover hurricane damage - not thunderstorm or hail damage.

DIFFERENCES

Charleston agents say they want to expand the pool territory, which sits along a narrow strip on the S.C. coast - east of U.S. 17 Business to the ocean in Horry and Georgetown counties - to I-95 or Interstate 20 or the entire state.

• The hurricane pool would be tax-exempt. The wind pool is a taxable S.C. corporation.

• The hurricane pool would be funded through premiums, reinsurance, funds accumulation, investment income and - as a last resort - a policy holder assessment.

• The wind pool assesses insurance companies in the event of massive loss - which insurance agents say keeps insurance companies from writing policies in South Carolina.

• Assessing policy holders would likely attract more insurance companies, which means more competition and availability of insurance.

• The assessment to property owners would be capped.

• Hurricane claims would be handled by adjusters from insurance companies. Wind pool claims are handled by appointed adjusters.

• The agents contend that would ensure better service in the aftermath of a hurricane.

• The hurricane pool would offer coverage up to $2.5 million on residential property and $5 million on commercial to reflect today’s construction costs. The wind pool offers residential coverage up to $1.3 million and commercial up to $2.5 million.

• The hurricane pool would offer replacement cost coverage on second homes and rental property. The wind pool offers replacement coverage on only owner-occupied units, Chapman said.

• With the hurricane peril removed, companies insuring inland properties may be more likely to insure coastal properties.

A similar pool worked in Hawaii, the group said. It was started in 1992 after Hurricane Iniki, and after 10 years without any major hurricane, the insurance industry resumed writing hurricane coverage.

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