Insurance Nightmare

Forum on rising premiums to draw large local crowd

The biggest threat to Grand Strand economic growth is not rising rising mortgage interest rates or cost increases for construction materials. It is rapidly rising insurance premium rates for commercial buildings and condominiums.

That's why it's no surprise that the Myrtle Beach Area Chamber of Commerce had to move today's public forum on rising premiums from the Convention Center to the gym at Myrtle Beach Middle School. The forum, which begins at 5 p.m., initially was intended for commercial building owners hit by premium increases that threaten to cripple their businesses. But once the word got around that S.C. Sen. Dick Elliott, D-North Myrtle Beach, had enticed S.C. Department of Insurance Director Eleanor Kitzman to attend, condo residents signed up for the event in droves, requiring that the chamber find a bigger venue.

S.C. Sen Ray Cleary, R-Murrells Inlet, also will host an insurance forum at Inlet Affairs at Murrells Inlet. Kitzman also will attend that event, which begins at 1 p.m.

Like folks who operate businesses on or close to the ocean, condo residents have been walloped by large premium increases. Many worry they can no longer afford to remain in their homes. No longer able to buy insurance from the state-regulated carriers, condo associations have had to turn to unregulated non-traditional carriers for coverage - at outrageous prices. The associations have no choice but pass on the increases - more than seven times last year's rates, in some cases - through homeowners fees.

The root problem is that insurers still writing policies jacked up their rates to recoup losses from Hurricane Katrina and other big storms. Carriers also seek to indemnify themselves against large losses from future hurricanes.

The state could ease the problem by extending the coastal wind pool line, which now ends at U.S. 17 Business, farther inland. Under this scenario, state-regulated carriers would be required to cover buildings in the wind pool, spreading the risk among building owners therein. The resultant rates would still be high, but lower than many pay now.

But Kitzman is reluctant to mandate a more generous wind pool line, for fear that such would drive some carriers out of South Carolina. It should be interesting to see whether she offers only condolences today, or has other rate-relief options to offer aggrieved local folks.