Poetic Injustice: Provider drops state insurance commissioner

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Pretty -- but hell in a hurricane!

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As if just living in a hurricane zone wasn't scary enough, losing your windstorm insurance may be the last straw.

In coastal South Carolina, nobody is immune to insurance loss. Not even the State Insurance Commissioner.

About a month ago, Scott Richardson's insurance company sent him a "dear John" letter. His erstwhile insurers had dropped him from their list of customers.

A Hilton Head Island resident, Richarson is now a prospect for  the State's "wind pool" -- officially known as  the South Carolina Wind & Hail Underwriting Association. The Association, explained Jeremy Hsieh of the Beaufort (South Carolina) Gazette, "is intended to provide last-resort coverage where other insurers have pulled out. A similar program Florida created in 2004 quickly attracted 1.3 million customers and turned the state-run insurance provider into Florida's largest property insurance provider, a fate Richardson and (Governor Mark) Sanford want the South Carolina wind pool to avoid."  Even within the wind pool, rates may rise by an average of 35% in October.

Last June, State legislators approved the following reforms, proposed by Richardson and Sanford:

• Tax breaks for insurance companies providing coverage where other insurers have pulled out.

• Tax breaks for property owners who open special catastrophe savings accounts or storm-fit the structure of their homes.

• Extending cancellation notices to a minimum of 90 days For policies that cover hurricane season, an extension of cancellation notices to a minimum of 90 days.

• Expanded eligibility for wind pool coverage.

These incentives are intended to protect less-wealthy homeowners, whose houses are valued at less than $300,000 US.

Francis Nicholson is a homeowner on Harbour Island, a barrier island right on the ocean. Ten years ago, her hurricane insurance cost around $2,000 US. Since then it has increased to as much as $10,000 US under the wind pool, which provides inferior coverage to that provided a decade ago.

Source:
Hsieh, Jeremy. "State insurance director is dropped by his own insurer." Beaufort (South Carolina) http://beaufortgazette.com/local_news/story/6651343p-5926903c.html, Gazette, September 4, 2007. Accessed on September 4, 2007.