A new bill would introduce considerable reform to the property owners of the state.
A legislator in South Carolina has taken the first shot at implementing major changes to the homeowners insurance system in the state for the first time in six years, with the goal of bringing down the cost of the coverage.
The proposed bill would offer coastal insurers with tax credits and provide consumers with improved comparison shopping.
This homeowners insurance bill was introduced by state Senator Tom Davis (R-Beaufort) and will open the debate regarding a highly controversial issue within the state, which is the rates that are currently being charged to property owners. Davis explained that “It’s the beginning of a conversation”.
Davis stated that the homeowners insurance market in the state could be repaired from its broken state.
He explained that the system for homeowners insurance in South Carolina is broken, but if more companies were taking part in the coastal market, it could be fixed again. He said that “We can make purchasing insurance easier and more competitive.”
The media in the state has performed investigations into the homeowners insurance marketplace, and has determined that the state has some of the most expensive rates in the country. Due to the recent hikes to the rates that were just experienced, many property owners are now paying more for their coverage than they are for their property taxes.
Among the provisions of the bill is one that would provide insurers that provide coverage to large numbers of coastal properties with tax credits. By implementing this bill, the cost to the state would be somewhere between $3 million and $4 million in revenues, according to Davis. He explained that this reduction in revenue would be completely worthwhile if it lowers the premiums of the property owners and boosts competition.
At the same time, some critics of the homeowners insurance bill say that while it does have a good goal, it doesn’t quite take things far enough. It has been suggested that by repealing the current state law that allows insurers to increase their rates very easily provided that the raises are no greater than 7 percent would make more of a difference if it was added on to Davis’s proposal.