Real Estate

You might be entitled to a break on homeowner’s insurance

March 29, 2010 

Does your home have hurricane shutters? Discount. Is your automatic garage door reinforced with bracing?

Discount.

Do you have roof shingles over sheathing reinforced at the joints, and is your roof deck attached with appropriately spaced nails, clips or straps?

Discount.

If your home was built in or after 2003, it likely has all these features, and your homeowners insurance premiums should be discounted accordingly. But first you will have to prove it to your insurer.

Robert Flaherty, a Sun City Hilton Head resident and owner of Be Sure Home Inspections, is among 15 certified wind inspectors in Beaufort and Jasper counties. Licensed and insured inspectors, who are listed on the S.C. Department of Insurance's Safe Home Web site, agree to accept $150 or less to provide homeowners with wind mitigation assessment reports.

Flaherty charges a flat $75 fee for wind inspections in Sun City, which accounted for most of the inspections he performed last year. Flaherty says his rates vary up to $150 depending on the distance he must travel and the size of the house. Much of Flaherty's business is generated by word of mouth.

Residents throughout Beaufort County should pay attention to their annual policy renewals. Forms notifying homeowners of discounts available for homes built to better withstand storms now are mandated by the S.C. Department of Insurance — so don't just toss out communications from your insurance company as junk mail without first reading them.

Using Safe Home's uniform inspection report, inspectors certify to insurers that materials and construction methods meet certain standards. Depending on their home's size and features, Flaherty said many clients see their annual premiums drop about 15 percent to 20 percent. In addition, homeowners who inquire are getting refunds on premium overpayments retroactive to Jan. 1, 2008, if mitigation features were in place as of that date.

Thomas Hambrick, a spokesman for The Hartford, which provides AARP-branded auto and home insurance, said his policyholders can save up to 30 percent on their premiums.

"The amount varies depending on the (mitigation) measures taken and the specific circumstances of the insured," Hambrick said. He would not disclose how many South Carolina policyholders have provided mitigation reports; saying the company considers the figures proprietary.

For homeowners whose premiums are escrowed in their mortgage payments, Frank Sheppard, executive director of Independent Agents & Brokers of South Carolina, advises making a call to your agent.

"Escrow is just a payment method and shouldn't disconnect the agent from acustomer," Sheppard said. "If a consumer wants to be proactive, an agent should be willing to jump on that immediately."

BB&T Carswell Insurance Services of Hilton Head Island has a client in Bluffton who saved $1,170 a year on premiums after installing storm shutters, secondary water resistance features and roof upgrades on a dwelling insured for $588,000. A home insured for $200,000 on Hilton Head got a discount worth $50 for its roof construction, while a Hilton Head dwelling insured for $1 million saved $1,486, according to agency manager Bill Thomas.

A resident whose home was built in 2007 in Beaufort's Hundred Pines neighborhood and insured for $437,000 saw his premiums drop 18 percent last year after providing his carrier with a certified report, according to an agent at Kinghorn Insurance of Beaufort.

Bill Fuge, property and casualty manager of Kinghorn's Hilton Head office, credits state insurance director Scott Richardson, a former state senator from Hilton Head, with helping South Carolina avoid some of the problems experienced in states such as Florida, Texas and Louisiana.

"He's really done a remarkable job," saidFuge of Richardson's Omnibus Insurance Reform Act of 2007, which established the Safe Home program and other initiatives. "He finds that balance between protecting consumers and bringing in competition. The more competition, the better the consumer is going to do," Fuge said. With nearly $200 billion of insured coastal property, South Carolina is the nation's eighth largest coastal market, according to the Insurance Information Institute. Some insurers stopped writing policies in the state after Hurricane Katrina. While Richardson says his department still is working through some issues, 16 new insurance carriers have come into the state.

"Consumers may have to make some phone calls," Richardson said, but added that overall, the reforms improved both availability and affordability of homeowners insurance.

In addition to discounts on premiums, the 2007 reforms include grants and state income tax credits to help owners of older homes afford to make them more resistant to storm damage, making them less risky to insure. Beaufort County received $303,660 in grants for 74 homeowners, who report premium reduction savings of up to 25 percent.

Catastrophe savings accounts are another component of the reforms and, like health savings accounts, allow homeowners to use tax-free dollars to cover policy deductibles or self insure.

Richardson's staff has met with members of Congress to discuss additional funding for the Safe Home program through both FEMA and stimulus money. His department is in the process of reviewing the mitigation discounts and credits offered by insurers in the state.

"We're monitoring all that and giving (insurers) the flexibility to give their own credits," he said. "We'll hold back on mandating what the credits should be as long as they play nice. Otherwise we'll sit them down for a prayer meeting."

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