Coastal homeowners may feel insurance pocketbook pain

Sanford says he feels the premium pain

By Jim Davenport

The Associated Press

COLUMBIA - As hurricane season approaches in June, some consumers can expect rising insurance rates along the coast, although others may not see any increase.

While 10 insurers have raised rates lately, about 21 have lowered them, according to the state Insurance Department. But because insurers often raise rates on the coast while lowering them elsewhere, the overall rate increase or decrease doesn't give the full picture.

"Homeowners who choose to live in an area that's more vulnerable to catastrophic storms and greater risks pay a higher price to match their greater risk," said Allison Love, executive director of the S.C. Insurance News Service.

State Farm and S.C. Farm Bureau, two of the state's largest insurers, haven't increased rates in the past year, Love said. USAA and Allstate, also among the state's top five insurers, both have implemented increases of more than 6 percent, Love said.

About 15 percent of the state's coastal consumers have wind-related damage insured through the S.C. Wind and Hail Underwriting Association because regular insurance companies aren't willing to handle the policies. Rates have been fairly stable for the past few years, but a 4.3 percent rate increase will go into effect on June 1, said Smitty Harrison, the association's executive director.

Federal flood insurance could also get more expensive this year under changes Congress is considering, said Eugene Kinerney, a spokesman for the Federal Emergency Management Agency.

Last May, rates rose about 2 percent.

The next adjustment will come in May, he said.

Gov. Mark Sanford talked about the pocketbook pain some state residents feel along the coast during a Cabinet meeting last week.

"Our bill went up $3,000," Sanford said of his Sullivans Island home as state Insurance Director Eleanor Kitzman talked about the approach of hurricane season. "Is there a big bump all along the coast?"

"There is," Kitzman said, noting that insurers find themselves paying more for reinsurance that spares their books from big losses tied to major catastrophes.

The value of the property they're insuring is also going through the stratosphere, which means higher rates as insurers keep up with rising rebuilding costs, Harrison said.

Harrison, for instance, said he's on a condo board. After a recent appraisal, the insurance rates for that property soared 29 percent along with the rising property value.

Sanford's Sullivans Island home is soaring in value, too. Charleston County says the beachfront property had a fair market value of just under $2 million in 2005, nearly twice what it was worth in 2001.

Kitzman said the Insurance Department is trying to attract insurers and to make sure "there are companies that will write them [policies] at all. Right now, everyone is able to get coverage. It may not be at a price that they think is reasonable, but that's relative."

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