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New Insurers Offer Beach Home Owners Second Chance

Competition and discounts easing crisis on the coast

The State - 05/25/08
By Kristy Eppley Rupon

Second-home owners have more options than a year ago to protect their beach homes during hurricane season, which starts in a week.

Nine new insurers are offering policies on the S.C. coast since lawmakers passed an insurance reform package in June.

"More companies means more choices and more competition, which is always better for consumers," said Allison Dean Love, executive director of the S.C. Insurance News Service, an industry trade group.

This time last year, insurance companies had sent out close to 20,000 non-renewal notices to coastal home owners in response to vicious hurricanes that swept through the Gulf Coast in 2005.

"Everyone was so shocked at the staggering loss that was seen as a result of Katrina and Rita," said Ann Roberson, spokeswoman for the S.C. Department of Insurance.

Insurance companies were unsure about surviving another hit, she said. Nearly 20,000 coastal policies were set for non-renewal between November 2006 and April 2007, leaving homeowners to look to the state to meet their insurance needs.

The state has a "wind pool" - funded by taxpayers - that offers coverage to those who can't get it from traditional insurance companies.

But after reform measures passed, new insurance companies - many of them from Florida - started coming into South Carolina.

One of those is Privilege Underwriters Reciprocal Exchange, a Florida insurance company that recently moved into the state to insure high-dollar homes, which were hit hardest by the insurance crisis.

The group will cover roughly 2,000 homeowners in coastal counties whose rebuilding expenses would be $1 million or greater, chief executive Ross Buchmueller said.

The company will spread its risk by offering policies to an unlimited number of inland homeowners whose rebuilding costs would be $500,000 or more. It will also offer insurance on cars, jewelry, art and watercraft.

Reform efforts in South Carolina focused mainly on helping full-time coastal residents. They can get state tax credits and state grants for making their homes more hurricane-resistant and can start catastrophe savings accounts to set aside money tax-free to meet deductibles or pay for damage not covered by their insurance.

But those with second homes along the coast also can benefit from increasing competition among insurance companies and the discounts - mandated by new state law - they offer for shoring up homes to withstand harsh weather, Love said.

She said taking steps like trimming back trees on your property and installing hurricane shutters typically can help you save anywhere from 2 percent to 18 percent on insurance premiums.

The forecast calls for 15 named storms, including eight hurricanes, along the Atlantic Coast this year, Love said. That's considered an above average season, according to weather experts.