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State Farm Insurance is cutting wind and hail coverage to its coastal South
Carolina homeowners beginning in March. The company will exclude wind and
hail coverage from 2% of statewide policies up for renewal this year,
company spokesman Bruce White said Wednesday. Customers will receive
notification 95 days before renewal date, he said, declining to release how
many customers were affected.
All homes losing coverage are within the boundaries of the S.C. Wind and
Hail Underwriting Association, commonly referred to as the wind pool. The
wind pool is a state-mandated, insurer-funded source of wind and hail
coverage for homeowners who can’t get it from private companies because of
loss history, proximity to water or other risk factors. “We pretty much take
all comers,” said Smitty Harrison, executive director of the wind pool. “We
don’t really care what your loss history is or how close you are to the
water.”
Coverage through the wind pool typically costs more than coverage through
the private market, however. The pool increased rates an average 35% in
October. Through the wind pool, the owner of a $250,000 home would pay an
average premium of about $2,133, according to figures from the S.C.
Department of Insurance. Information on rates from private companies is
unavailable for proprietary reasons.
“The wind pool is designed to be a higher priced market to match the higher
risk,” said Allison Dean Love, executive director of the S.C. Insurance News
Service. The wind pool insures about 33,660 homes, which Harrison estimated
to be about 15% of the homes within the association’s boundary. In
Charleston County, that boundary includes portions of James Island, Johns
Island, Wadmalaw Island and Edisto Island, as well as Edingsville Beach,
Kiawah Island, Botany Bay Island, Folly Island, Seabrook Island and Morris
Island.
In Beaufort County, Lady’s Island, Coosaw Island and Morgan Island are
within the wind pool boundary.
State Farm, meanwhile, insures about 25% of the state market, but it’s
unknown exactly how many homes the company insures within the wind pool
boundary or throughout the state. The wind pool, meanwhile, is the “market
of last resort,” Love said. “There’s more than 100 homeowner insurance
companies in the state of South Carolina,” she said, saying customers losing
coverage can get it elsewhere. “There are new companies coming into South
Carolina to do business.”
Many of those companies, however, may not provide wind and hail coverage
either, as State Farm and its competitors have scaled back that coverage for
the last several years.
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