Coastal Property Insurance Relief
This post is taken from an article by Sheila Watson in the Daily Journal.
Several plans for insurance relief proposed recently by state politicians aim to alleviate the high cost of coastal property insurance and protect consumers against cancellation and non-renewal of policies.
However, professionals in the insurance industry are both welcoming and criticizing the proposed legislation.
In February, Sen. Glenn McConnell, R-Charleston, president pro tempore of the state Senate, introduced a bill to reduce excessive coastal insurance rates. The proposed South Carolina Insurance Accountability, Reorganization and Relief Act of 2007, bill S. 412, would convert the current Wind and Hail Association into the S.C. Hurricane Underwriting Association.
The new entity, designed to be tax-exempt, would be a public body of the state and would have the ability to issue bonds for which it could seek tax-exempt status.
The S.C. Hurricane Underwriting Association would expand the current territory of the wind pool, which is a strip of land and barrier islands to the east of U.S. Highway 17. The association would provide hurricane insurance coverage for the current area of the wind pool plus all areas within Beaufort, Berkeley, Charleston, Colleton, Dorchester, Georgetown, Horry and Jasper counties not presently included in the wind pool coverage.
McConnell, chairman of the Judiciary Council, said in a statement that the association would be funded by premiums from the policyholders, and the premiums would be based on actual expected costs of providing hurricane coverage that are actuarially sound.
“At first, this coverage may not be cheap, but it will reflect the actual risks faced in South Carolina,” he said.
In addition, the bill would require that the director of the state Department of Insurance be elected instead of appointed and would establish the South Carolina Hurricane Damage Mitigation Program within the Department of Insurance to help insured people benefit from upgrading their property to withstand hurricanes.
The bill also would provide that notice of a policy not being renewed be given at least 100 days prior to expiration of the policy, and, in the case of a non-renewal during hurricane season, which runs from June 1 to November 30, notice must be written and given at least 100 days prior to expiration or by June 1, whichever is earlier.
In March, McConnell proposed additional protections against arbitrary cancellation and non-renewal of insurance policies.
“By combining the concepts for extended notice and for the South Carolina Catastrophe Modeling Act, which I previously introduced with (several) co-sponsors … in S. 412, with these new provisions restricting when policies are cancelled or non-renewed and when deductibles may be increased, I believe homeowners who are experiencing sudden cancellations after years of patronizing a particular insurance company will receive the protections they deserve,” he said.
You can read the original article here, or for more reading, check out Bill Settlemeyer’s article here.
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