|By Gina Smith, The Island Packet (Hilton Head Island, S.C.)|
|McClatchy-Tribune Information Services|
It's been nearly a year since
Their work is finally getting some attention -- and legislative traction.
Davis hopes to introduce a bill soon.
Statewide, premiums have risen 71 percent during the last decade and are nearly three times higher than in 1996.
In fact, Ferguson says even though the state's coast, particularly in
"It's a serious, serious problem. It's a crisis," said Ferguson, a retired
AND A DRAG ON SALES
Inflated rates damage Lowcountry home sales and the area's economy in general, according to
"This perceived threat of hurricanes affects tourism and home buyers because people are afraid there is more hurricane risk than there actually is," he said, offering examples of clients who have hesitated to move to the area and retirees who have settled elsewhere because of high premiums.
Attempts Thursday and Friday to reach Farmer for comment were unsuccessful. However, his spokeswoman,
"Director Farmer and the department are not only concerned about reducing the cost of coastal property insurance, but are also concerned about the availability of coastal property insurance," she said.
Farmer told senators during his confirmation hearing that premiums matched the risks being assumed by insurance companies. Later, however, he said he would make rate reduction a priority.
A spokesman for Gov.
STATE'S STOP-GAP MEASURE
In the aftermath of Hurricane Katrina, many insurance companies either substantially increased premiums for wind-damage coverage or stopped writing such policies altogether in states considered to be prone to hurricanes.
To help residents find coverage,
"That worked for a while," said Davis, who at the time was chief of staff for Gov.
WHY RATES ARE ON THE RISE
The reasons for the premium increases, which are increasing for residents across the state, are complicated and multifold.
Twisdale points, in part, to a state law allowing insurance companies to raise rates up to 7 percent annually. Some point to hurricanes in other coastal states that have caused immense damage.
And others attribute the rise to the complicated nature of setting premiums, said
"We're selling a product that we don't know its cost until the future. It's a complicated product," said Dubisky, adding that current rates are not based on what homeowners have previously paid but the future risks the insurance company believes it is assuming. To calculate that, insurance companies are taking into account the rising costs of repairing and rebuilding homes.
The average claim paid out by insurance companies in
And although hurricanes infrequently hit
The level of building along the state's coast also means higher premiums for everyone across the state, he added.
About 28 percent of the state's total insured value is along the coast; in
"So we have more that could be in harm's way than other states," he said.
Premium increases are not out of line, according to
"In many cases, insurers are moving rates in coastal areas in annual steps, taking two or more years to get to adequate rates that cover the costs of providing insurance," he said.
Ferguson puts some of the blame on the state for failing to regulate insurance companies in recent years.
And he has doubts it will improve under Gov.
"You have to have a commissioner who looks after the industry and also the people," he said. "And you don't get that with a lobbyist. It's letting the fox guard the hen house."
Friday, Haley's office defended its pick of Farmer.
THE NEW APPROACH
Davis said he and others are considering a new, twofold approach:
* Cutting red tape and providing incentives to entice insurance companies to do business in
* Giving S.C. homeowners and business owners easily accessible information so they can shop around for affordable coverage.
"Shopping for insurance is a daunting thing," Davis said. "You've got pages and pages of exceptions and fine print. But we've got the technology to allow consumers to access a lot of data that is non-threatening and empowers them. And that's a role the insurance commissioner can plan, to take a complicated subject and boil it down and make it easy to compare."
Initiative to lower insurance premiums gaining traction, leaders say,
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