What does new study say about insurance rates?

info@islandpacket.comJuly 11, 2013 

Construction workers build a single family home on the corner of Duke Street and Adventure Street in Beaufort in July.

FILE, STAFF PHOTO

The S.C. Department of Insurance owes answers to consumers.

It has new information that should address a big question along the coastline: Is the risk from storms being accurately assessed by insurance companies?

Following persistent pushback from coastal consumers who feel they are paying too much for home insurance, the state Department of Insurance hired a panel of experts to examine catastrophe models used by insurance companies to set rates. It could well be the reasonable, third-party examination that consumers need. The panel included a nationally recognized actuary, a meteorologist and an engineer, according to The (Charleston) Post and Courier.

Its report was submitted in late June, and now the department must share what it learned. So far, it has declined to do so.

Secrecy envelopes the computer modeling because it supposedly includes proprietary information. In fact, panel members signed confidentiality agreements to see the information provided by the modeling companies.

Still, even without divulging confidential information the Department of Insurance can give consumers some answers. When people are paying $10,000 and more a year to insure their homes, their reasonable questions about rates must be answered by the Department of Insurance.

The department is a public entity, part of Gov. Nikki Haley's Cabinet. Its mission "is to protect the insurance consumers, the public interest, and the insurance marketplace by ensuring the solvency of insurers; by enforcing and implementing the insurance laws of this state; and by regulating the insurance industry in an efficient, courteous, responsive, fair, and equitable manner."

First on that list is protecting consumers.

Consumers must acknowledge that their greatest protection is to have insurance available, and that it be through companies that can pay claims even when the rarest catastrophe strikes.

Consumers also must realize they are protected when insurance is available through a thriving, competitive free market, not underwritten by the deeply-indebted federal government.

And consumers must realize the rising exposure insurance companies face as high-ticket development engulfs the coastline.

But after all that, the basic question remains: Is the risk from storms along South Carolina's coast being accurately assessed?

The Charleston newspaper reported last year that South Carolina property owners pay a third more than property owners in North Carolina and Georgia, based on data from the National Association of Insurance Commissioners.

Daryl Ferguson, the Beaufort County resident who has tried to get answers to the coastal insurance puzzle, has produced reams of material that he says proves South Carolinians are paying too much.

South Carolina has tried before to review the catastrophe models with no success. It now appears to have new information, and the public deserves to see proof that risk is being accurately assessed.

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