Governor Mark Sanford and Department of Insurance Director Scott Richardson today announced legislation aimed at alleviating the high cost of coastal property insurance. Gov. Sanford made the announcement with House Labor, Commerce and Industry Chairman Harry Cato, who will be introducing the House legislation.
"South Carolina - along with other states on the East Coast and Gulf Coast - continues to face the twin problems of escalating premiums and fewer insurers," Gov. Sanford said. "I think that unlike other states like Florida that acted in a knee-jerk fashion to these problems, we have to be incredibly deliberate in what we do. These solutions are aimed at what I believe is ultimately the key to addressing this problem, and that is finding ways to encourage, rather than discourage, insurers to write policies along the coast. I want to thank Chairman Cato for being willing to work with us toward that end, and we look forward to helping move this bill through the legislative process."
"Increasing coastal property insurance rates are a crisis to residents and businesses along our coast," Chairman Cato said. "In evaluating legislative solutions to this crisis, I believe that it is important for all ideas to be on the table. I look forward to working with the Governor, Director Richardson, other legislators, industry representatives and consumers in finding a comprehensive solution to the problem that will provide long-term stability to the property insurance market."
The legislation would create a number of tax incentives aimed at directly impacting the cost to homeowners, including tax deductions for catastrophe savings accounts, tax credits for disaster mitigation measures, tax credits for lower-income property owners who pay more than five percent of their incomes toward insurance premiums, tax-free savings accounts for homeowners who choose to carry very large deductibles or create accounts to "self insure," and tax credits for insurance companies who write full coverage for property owners along the coast.
The legislation would also provide tax credits for property owners who purchase building supplies used to make their homes more storm resistant, would require that private insurers give premium discounts to homeowners who have made their structures more storm resistant, and would require that insurers give greater notice regarding cancellation of policies.
In addition, the legislation would reform laws relating to the wind pool line to give clearer guidance on the circumstances under which that line can be moved. Using the current statute, Department of Insurance Director Scott Richardson modified the wind pool line yesterday as a step toward alleviating existing availability issues along the coast.
"After a thorough analysis of the insurance market along the coast and a number of one-on-one meetings with insurers, we believe this adjustment of the wind pool line will be a step toward addressing insurance availability issues along the coast," Richardson said. "However, for us to impact the cost of coastal insurance, we still think it's critical that we move forward on this legislation, and I will be working with the governor and members of the legislature to move these important changes through the General Assembly."