Insurance Forum Claims Markets Are Improving – BUT ARE THEY & For Whom?     Rita Riley from Re/Max

            On Thursday evening 8/28, from 6-7 PM, a Coastal Insurance Forum took place at The Country Club of Hilton Head co-sponsored by Tom Davis (nominee for State Senate) & both the Bft Co Assoc of Realtors & the Hilton Head Area Assoc of Realtors. Upon Regis-tering, guests received 2 handouts: One was a brief program detailing the panelists & the second was a 2 page explanation covering: Why have coastal property insurance rates increased? Summary of Omnibus Coastal Property Insurance Reform Act of 2007, Summary of the South Carolina Wind Pool and FAQs: Catastrophe Savings Accounts. Panelists consisted of Scott Richardson  – the Commissioner of the SC Dept of Insurance, Dr. Peter Sparks – a Civil Engineering Professor from Clemson Univ, Bill Fuge of Kinghorn Insurance and 2 prominent Realtors Gerry Prud’homme and Mike McFee from Hilton Head & Beaufort.

            Davis led off the program by introducing himself and the purpose of the Forum. Then he gave a brief background on each participant and asked each of the 5 panelists some of the questions which had been sent up to him from the audience.

            Scott Richardson, the Director of the South Carolina Dept of Insurance since January 2007, was actually the main speaker – giving the opening remarks which covered the availability & affordability of wind insurance in SC as well as discussing the market-based incentives provided in the Omnibus Coastal Property Insurance Reform A of 2007.                        While Scott Richardson was speaking the audience was writing their questions to be submitted to the various speakers and these went to Tom to be directed to each one in turn as their time came up. Tom chose not to present the most important question asking:  “what was being done to help the problems faced by over 80% of the homeowners – the secondary homeowners & their dilemmas and needs for insurance.” 

            Scott talked about the Omnibus Reform and how it came about and why SC was not following the Florida plan of the State take over of Insurance (which has proven not to work). Instead of State takeover, his commission is working to attract more insurers to issue coverage for Wind & Hail in our coastal area. He mentioned his negotiations with several companies – and their needs to spread out their risk because of the billions of dollars at stake and their PML – Probable Maximum Loss. He said that 12 new insurance companies have entered the state since Jan, ’07. (But will these companies write YOUR insurance???).

            Dr Sparks, a civil engineer, talked of structural retrofits problems & covered items like weather proofing, window film, shutters & protecting the envelope of the home. These are the most affordable & effective improvements but he admitted he didn’t know details about rebates & the amounts of insurance ‘credits’ they would bring when people did enhance their physical protection. But, he did say that the best advice he could give was to move inland!

            Bill Fudge of Kinghorn Insurance Services explained why costs differ between primary & secondary homeowners… Frequently secondary homeowners have greater problems because many homes are unoccupied for long periods of time & damage sometimes can go unnoticed. He also said that the process of looking for insurance could take as long as 30 days because there are variable risks, & unique situations. Most of the companies he mentioned – such as Allstate, Travellers, Hartford, etc USED TO write Wind & Hail - but that’s all changed now and they don’t even want to cover as far in as the Bluffton area. 

            The two Realtors talked about insurance needs for lower & upper end homes and the added costs in today’s market including the elevation certificates required by mortgage companies. They mentioned the ‘sticker shock’ to the Buyers for insurance costs & the problems related to various coverages within each of the policies that are not changeable.

            The Omnibus Reform Act had 10 items listed which were covered by the program & MY main question of the evening was “which one of these 10 items was a benefit to the secondary homeowners of SC?” It talked about the catastrophic savings accounts, tax credits for mitigation, reduction of income tax, lower-income property owners tax credits, “self-insurance” tax credits, & the reforms of the Wind Pool. However, all 10 of the items have such limitations that NONE OF THEM can be of benefit to the ANY of the secondary homeowners. Now, since secondary homeowners make up OVER 80% of the coastal areas – that only leaves 20% of the population for this Act to benefit –& that figure is further dwindled down by all the restrictions & limitations. “ Omnibust?”

            Tom Davis quickly closed the forum at 7PM without asking my question regarding secondary owners. However, Scott Richardson, after the meeting said that ‘they’ will be looking into this very thing in the future and encouraged people to send him emails with their questions. He did not have any business cards to give out, but suggested looking up the SC Dept of Insurance on the web and directing your questions to him through that. Actually, his email is: srichardson@doi.sc.gov