Residents on the South Carolina coast could see home insurance costs drop with a bill that received key approval Tuesday in the House.
The legislation is part of Insurance Director Scott Richardson’s response to insurance rates rising as much as 400 percent in hurricane-prone areas. Insurers have dumped policies and raised premiums along the coast, leaving thousands of property owners uninsured or struggling to pay for protection.
State Rep. Harry Cato, R-Travelers Rest, said the insurance-friendly proposals already have helped stabilize the market. Some insurance companies that had planned to cancel more policies decided not to, said Cato, chairman of the House Labor Commerce and Industry Committee.
The bill, expected to cost the state $6 million, would offer sales and income tax breaks to residents who make their homes more hurricane resistant with improvements such as storm shutters. It creates a matching grant program for homeowners to apply for up to $5,000 to upgrade their homes and requires insurers give premium discounts for upgrades.
It would also allow homeowners to put money into tax-deductible hurricane savings accounts. Residents could use the accounts to offset large deductibles or forgo insurance altogether and self-insure.
The tax breaks would not apply to vacation homes. Those able to afford a second home on South Carolina’s coast should not receive tax incentives, Cato said.
The bill, backed by Gov. Mark Sanford, also would give insurers tax credits for writing full-coverage policies along the coast and double to 60 days from 30 the notice required for homeowners before policies are canceled.
Sanford and Richardson advocated the bill in March when the director expanded the “wind pool,” a state-run insurance program that helps provide coverage in areas where private insurers don’t offer protection.
Sanford earlier this year appointed Richardson, a former insurance company owner.
Sanford spokesman Joel Sawyer said there are two ways a state can handle skyrocketing rates. “You can either drive insurers out of the market and drive up the rates or try the approach we’re moving for and drive costs down,” he said.
The bill requires another perfunctory vote before heading to the Senate.
Was this article valuable?
Here are more articles you may enjoy.