Lowcountry residents seek relief from wind, flood insurance hikes

dburley@islandpacket.comNovember 13, 2013 

More than 100 people filled an auditorium Wednesday night looking for answers from an S.C. Senate panel about the soaring cost of wind and flood insurance.

Resident after resident hit hard by rate increases in the Lowcountry urged the S.C. Coastal Insurance Subcommittee to do something to calm the wind and water rates.

"We've seen a disconnect between the risk that insurance companies are assuming and the premiums they are charging," state Sen. Tom Davis, R-Beaufort, said of wind insurance rates in the state. Those rates have risen 71 percent in the past decade, according to data compiled by Daryl Ferguson, a retired Beaufort resident who collected statistics on the coast's high home-insurance rates.

Flood rates, controlled by the National Flood Insurance Program, have increased for some because of a federal law that went into effect Oct. 1.

'HAVE YOU SEEN A HURRICANE?'

The gathering at the University of South Carolina Beaufort's Hilton Head Gateway Campus was the second of three public forums along the coast hosted by the subcommittee, a sub-panel of the Senate's Banking and Insurance Committee.

Davis plans to use the hearings to gather public testimony. A bill he's sponsoring focuses on attracting more insurance firms to the state to create a more competitive market. It also gives homeowners more information and allows them to comparison shop for policies, he said.

Davis said current policies don't reflect the risk of a catastrophic storm in the area, which is much lower than the Outer Banks or the Gulf Coast, for example.

Many in the crowd agreed.

"How many of you have seen a hurricane?" Dan Riedel, a Lady's Island resident, asked. "I haven't. I'm paying for one, but I'm not getting it."

Part of Davis' bill would require insurance companies to be more transparent and consumer-friendly, something many attendees supported.

Ray Farmer, director of the state's Department of Insurance, said the bill would call for "common sense things companies ought to be letting consumers know."

Former director Scott Richardson cautioned Farmer to be careful with what becomes mandatory for companies because the state is a "small player" compared to others.

"If you start passing laws that require a company to do lots of things, you may see them leave," he said.

HOME SALES AFFECTED

The panel also fielded questions about the national flood insurance increases, which will boost payments by 25 percent a year for those with second homes or rental units in low-lying areas of Beaufort County, according to the Federal Emergency Management Agency.

Those who bought property after July 2012 are charged full price for flood insurance under the new law, a massive shift from previously subsidized payments. The change increases premiums tenfold for some property owners, according to area real estate agents.

Andy Twisdale, a Hilton Head Island real estate agent who spoke at the meeting, said agents have lost deals because the new rates are too high.

"In our market, it impacts every transaction," he said.

Some island residents have seen costs rise to $20,000 annually, said Jocelyn Staigar of the Hilton Head Area Association of Realtors.

"For many retirees, a home is their biggest investment," she said. "We're seeing people in their 80s, 90s, who are ready to sell but can't sell their homes."

Though the federal increases are outside the purview of state government, Davis said he supports a recent bill sponsored by U.S. Rep. Mark Sanford to delay the hikes for at least four years.

"To be blunt, there wasn't much thought about the consequences of this (the federal increases)," said Steve Gilbert, a researcher for the state Senate committee.

Follow reporter Dan Burley on Twitter at twitter.com/IPBG_Dan.

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