South Carolina Renews Expansion of Wind Farm Territory

A temporary order extending the area where South Carolina’s residual property insurance market offers insurance has been renewed for another two years.

An order issued by South Carolina Insurance Director Ray Farmer says that renewing the 2007 expansion of the South Carolina Wind and Hail Underwriting Association (SCWHUA) territory is necessary “to address coastal areas where insurance coverage essential property is not yet readily accessible. “

In addition, the order says the renewal of the expansion will also help market disruptions in areas with more significant exposure to hurricanes and other wind events.

The original expansion order was issued in March 2007 and has been renewed every two years since 2009. It gives SCWHUA, also known as the Wind Pool, the ability to offer wind and hail coverage in the state’s coastal real estate markets that do not are eligible to purchase coverage in the standard insurance market. Coverage is offered in five coastal counties in South Carolina – Beaufort, Charleston, Colleton, Georgetown and Horry. Data provided by SCWHUA on May 31, 2020 observed a policy count of 17,582 with over $ 36 million in premiums in effect as of January 31, 2020.

The growth rate of SCWHUA’s subscribed premiums decreased from 41% in 2007 to less than 1% between 2009 and 2011. Subscribed market premiums reached a high point in August 2011 and have since decreased by almost 66% compared to August 31, 2011 and October 31, 2020. The policy count also decreased by more than 66% and the total insured limits decreased by 70% during the same period.

According to the new expansion order, the South Carolina coastal property insurance market has stabilized thanks to the expansion, which has improved coverage availability for South Carolina coastal property owners and reduced the number of consumers who were unable to find coverage.

Allowing the order to expire “may result in significant market disruptions,” says the order.

Farmer’s order attributed the positive changes to improvements in the availability of reinsurance coverage; greater availability in the voluntary market, especially in the commercial property insurance market; expansions of the territory covered by SCWHUA; and the consistency of the SCWHUA territory since its initial expansion in 2007.

Still, the expansion remains necessary due to indications that property insurers remain concerned about their exposure to catastrophic hazards, despite a stable property insurance market in South Carolina and greater availability of reinsurance.

“Insurers continue to seek to limit their potential losses in certain coastal regions,” says the request. “As a result, some consumers may find it difficult to find essential property insurance coverage. The expansion of the SCWHUA territory has been a safety net for these consumers. If the expansion is not renewed, there could be significant disruption to the coastal property insurance market. “

The new order takes effect on the January 2019 order expiration and will remain in effect until March 29, 2023, unless it is vacated or replaced by action by the South Carolina General Assembly.

In 1971, the South Carolina Legislature demanded that the insurance industry provide wind and hail insurance coverage to homeowners and businesses in the coastal area. The association is under the direction of a board of directors that acts as the governing body of the organization.

Read the request: renewing the expansion of the SCWHUA territory