Liberty Mutual to drop some homeowners within 10 miles of SC coast

An undisclosed number of South Carolina homeowners whose residences are insured by Liberty Mutual will be losing their coverage this year.

The Boston-based company has decided not to renew about 2.5 percent of its policies statewide, with the bulk of the cancellations affecting certain homes within 10 miles of the coast, said spokesman Glenn Greenberg.

Liberty's decision to scale back its coverage stemmed from a routine evaluation of its policies, he said.

"We are engaged in a program to better manage our overall exposure so it's all evenly matched across the state," Greenberg said Monday.

In a form letter Liberty Mutual has sent to some customers, it said it is "taking this action to reduce our exposure level related to the catastrophe of wind."

"If something catastrophic should happen, we need to not be disproportionately affected," Greenberg said.

Liberty is not pulling out of the coastal market completely, but for now it isn't writing any new business for homeowners near the ocean, he said.

"We are writing homeowners business in South Carolina," he said. "We certainly want to grow our business in South Carolina."

Liberty said the number of policies that won't be renewed is relatively small -- less than 1,000 -- but it declined to be more specific. Greenberg noted that the company accounts for just 2 percent of the property and casualty market in South Carolina.

In 2008, Liberty's statewide premiums from homeowners totaled about $22 million, for a 1.95 percent market share, according to the latest data from the S.C. Department of Insurance.

Bill Lesemann of the independent Lesemann Insurance Agency said he has lined up replacement coverage for some of the affected local Liberty customers.

"The best thing you can tell these people is to shop around," Lesemann said. "There's still product out there that can help them."

Lesemann said insurers routinely review their policy portfolios for risk and adjust them accordingly. He noted that State Farm has stopped offering coverage to homes on parts of the Charleston peninsula. Also, Allstate Insurance has notified 2,400 customers who own mobile or manufactured homes along the South Carolina coast that it will not renew those policies.

"It's the nature of the beast," Lesemann said.

He said one reason insurers are scaling back is that they are facing higher costs from reinsurers, which provide coverage to retail-level underwriters when major catastrophes strike.

"So they're coming off policies in what you call high hazard-prone areas that are subject to hurricanes and things like that," Lesemann said.