This pool which is a coverage option of last resort, has been seeing its participants dwindle for 3 years.
According to the South Carolina Wind and Hail Underwriting Association, the number of homeowners who have been leaving the state’s last resort wind insurance pool has been continuing over the last three years.
The program is meant for homeowners who can’t obtain this coverage anywhere else.
For some time, the special wind insurance pool program was the only option that many homeowners had available to them. However, this state backed coastal homeowner fallback program is starting to see its participation declining as more options open up among private insurers. Property owners are finding that they are able to not only find coverage with the private alternatives, but that it can be less expensive for them, as well.
By combining the private wind insurance with homeowners policies, many are finding convenience and savings.
It is this discovery that is leading hundreds of coastal property owners to step out of the wind pool. This has been going on for the last few years and the trend appears to be continuing. At the end of May, the state program – which provides an expensive but guaranteed limited coverage against wind hazards for commercial and residential property owners along two coastal zones – had 40,625 policies, bringing in $89.5 million in premiums.
This represents a drop of 14 percent from the end of August in 2011, when there had been 47,366 policies that brought in $97 million in premiums. The primary reason behind this decline is that there is a growing number of private insurance companies that have been making their way into the local market. This, according to the South Carolina Wind and Hail Underwriting Association executive director, Smitty Harrison.
Harrison explained that “While individual insurer writings are small, they have collectively made a difference.” Moreover, the impact that they have been making is on the grow.
Among all of the wind insurance cancellations, the largest number came from homeowners in Zone 1, which is the area in which there is the highest risk. There, 24 percent of the policies were ended within that same span of time. That said, there was a gain of 3 percent in Zone 2 from August 2011 to May 2014.