The increases that coastal property owners have experienced are attributable to the cost of reinsurance and the cost of reinsurance is attributable, in part, by rating agency actions.
Rating agencies rate the financial strength of insurers. For example, an insurance company with an A++ rating may be classified as "superior" and an insurance company with an A- rating may be classified as "very good." Ratings are important to both consumers and insurers. Consumers benefit from these ratings because they are assured that their claims will be paid. Additionally, insurers with better ratings receive better credit terms than insurers with lower ratings.
Based on the current weather predictions and catastrophe model estimates, rating agencies have increased the capital requirements for insurers writing coastal property insurance. Prior to 2005, insurers generally were required by rating agencies to have sufficient capital to pay claims associated with one 100-year storm (a storm that has a 1% chance of happening in any given year). After 2005 and the realization that multiple major hurricanes could strike the same or nearby areas, rating agencies doubled their capital requirements.
As a result of rating agency actions, insurers have sought to purchase additional reinsurance. Reinsurers, which are subject to the same rating agency actions, cannot write as much business as before and/or they must charge higher premiums to insurers because of the increased demand for their product. Just as rating agencies were requiring insurers to purchase more reinsurance, they were requiring reinsurers to sell less at a higher price. These increased reinsurance costs are ultimately passed along to consumers.
The Department recommends that all consumers shop around to see if there is another carrier with a more competitive rate. Additionally, the Department encourages consumers to take advantage of the reforms set forth in the Omnibus Coastal Property Insurance Reform Act of 2007. For example, insurers are required to offer premium discounts for mitigation measures on policies effective on or after January 1, 2008. Also, tax credits are available for costs incurred in making your home more wind resistant as well as for supplies purchased to retrofit your property.
The Omnibus Coastal Property Insurance Reform Act of 2007 established a grant program for homeowners to help them strengthen their property and make it more resistant to the high winds associated with hurricanes and severe wind storms. Please visit http://www.scsafehome.com/ for more information about the program. Finally, consumers may want to consider setting up a tax free Catastrophe Savings Account to cover the cost of their deductible.
Back to the Top
The Omnibus Coastal Property Insurance Reform Act of 2007 provides certain income tax credits for the costs a homeowner incurs in making his home more resistant to losses due to hurricane damage.
Section12-6-3660 provides an income tax credit for the costs incurred to retrofit a structure qualifying as the taxpayer's legal residence to make it more resistant to loss due to hurricane, rising floodwater, or other catastrophic windstorm event. The tax credit for any taxable year is limited to 25% of the total costs incurred or $1,000, whichever is less.
Section12-6-3665 allows an income tax credit of up to $1,500 for state sales or use taxes paid on purchases of tangible personal property used to fortify one’s legal residence.
Regulation 69-75 prescribes the standards which must be met to qualify for the income tax credits as detailed in the South Carolina Safe Home Resource Document for Mitigation Techniques. Fortification measures must be accomplished in accordance with the standards contained in the Resource Document, a complete copy of which is available below.
The Resource Document describes each of the qualifying fortification measures from the regulation in detail to assist the homeowner, contractor and inspector in determining the correct products to be used and the procedures for completing each mitigation technique. The items used must have an ICC Evaluation Services Legacy Report or other appropriate test reports that are acceptable to the building officials after review for that location.
The fortification measures that qualify for the tax credit include roof covering construction: roof attachment; roof-to-wall connections; secondary water resistance; and opening protection. All retrofitting measures have to comply with the current edition of the International Residential Code as adopted by the South Carolina Building Codes Council or an engineer's or manufacturer's requirements for the wind speed for the area in which the home is located.
Regulation 69-75 also sets forth the evidence that a taxpayer must provide to the Department of Revenue to claim the credit. This includes a written certification report from a professional with experience in construction techniques with the appropriate receipts attached or an affidavit from the taxpayer certifying that the fortification measures have been implemented. Copies of the receipts must also accompany the taxpayer's affidavit.
The final regulation became effective June 26, 2009 and is applicable to all taxable years beginning after December 31, 2006.
Questions?
The Department of Insurance, in consultation with the Department of Revenue, has published a list of frequently asked questions regarding the tax credits.
FAQs: Tax Credits for Fortification Measures
Please contact the South Carolina Department of Revenue with additional questions relating to the filing process for a taxpayer to receive the credit at (803) 898-5709 and request information concerning form SC SCH. TC-43, Residential Retrofit Credit. You may also download a copy of TC-43 on the Department of Revenue's website, http://www.sctax.org/, or by clicking here.
Other questions may be referred to the SC Safe Home Program via e-mail to scsafehome@doi.sc.gov.
Cover [pdf 62k]
Section A. Introduction [pdf 40k]
Section B. Roof Deck Attachment [pdf 27k]
Section C. Secondary Water Barrier [pdf 217k]
Section D. Roof Coverings [pdf 25k]
Section E. Gable End Bracing [pdf 474k]
Section F. Reinforcing Roof to Wall Connections [pdf 115k]
Section G. Opening Protection [pdf 1227k]
Section H. References and Resources [pdf 24k]
Back to the Top
No meetings or events are scheduled at this time.
Back to the Top
2009 South Carolina Hurricane Guide [pdf 1047K]
Institute for Business & Home Safety
The Institute for Business & Home Safety’s mission is to reduce the social and economic effects of natural disasters and other property losses by conducting research and advocating improved construction, maintenance and preparation practices.
SC Department of Insurance - Office of Consumer Services
The Office of Consumer Services provides assistance to consumers on a wide range of insurance claims and policy issues. They will be happy to respond to consumer needs relating to homeowners and coastal insurance; provides consumers with market assistance by helping to locate hard-to-place insurance coverages within the insurance market; and assists consumers following a catastrophic event.
SC Emergency Preparedness
The SC Emergency Preparedness Office provides information about South Carolina Emergency Operations Plan, Hurricane Plan, Earthquake Plan and selected other natural hazard plans.
SC Insurance News Service
The SC Insurance News Service is a non-profit, non-lobbying organization which provides property and casualty insurance information to consumers and the media.
SC Safe Home Grant Program
The SC Safe Home program was created by the Omnibus Coastal Property Insurance Act of 2007. The goal of the program is to assist eligible South Carolina property owners with the retrofitting of their homes to make them more resistant to losses from hurricane damage.
SC Wind and Hail Joint Underwriting Association
The SC Wind and Hail Joint Underwriting Association (SCWHUA) is the residual property insurance market in South Carolina. It provides coverage for the perils of wind and hail in the coastal areas of the state designated by the Legislature as "Beach."
The Federal Alliance for Safe Homes - FLASH, Inc.
FLASH is a non-profit, 501(c)3 organization dedicated to promoting disaster safety and property loss mitigation. Their mission is to promote life safety, property protection and economic well-being by strengthening homes and safeguarding families from natural and manmade disasters.
Our online search tool for insurance companies allows consumers to find information about insurance companies licensed to do business in South Carolina, including contact information, licensed producers, types of insurance offered and complaint history.
To find information about an insurance company doing business in South Carolina, please follow the instructions below.
- After reviewing the list of insurers in the Market Share Report, select the company of your choice and write down the 6-digit company code number.
- Click "Search for Insurance Companies."
- Type the 6-digit code into the South Carolina company code field and then click search.
- When the result appears, click on the company's name to view demographics and license information.
- To view the company's complaint summaries and search by city for producers appointed by the company, click on the identified link on the right side of the page.
Back to the Top
The South Carolina Market Share Report is a complete list of the leading insurers writing business in South Carolina. The Report is developed from the amounts reported on the insurers' South Carolina Fee and Tax Returns and verified with the amounts reported on their Annual Statement. Federal Employees Health Benefits Program is included in Accident and Health - All Lines.
2007 Complete Market Share Report
Market Share Reports by Line of Business
Accident & Health Insurers
Annuities Insurers
Commercial Auto Insurers
Earthquake Insurers
Eligible Surplus Lines Insurers
Farmowners Multiple Peril Insurers
Federal Flood Insurers
Fire Insurers
Homeowners Multiple Peril Insurers
Life Insurers
Private Passenger Auto Insurers
Title Insurers
Workers Compensation Insurers
Back to the Top
Company Claims Phone and Fax Numbers [pdf 20k]
Back to the Top
Consumer Complaint Form [pdf 26k]
Back to the Top
Phone: 803-737-6180
Toll-Free: 800-768-3467 (Accessible only in SC)
Email: consumers@doi.sc.gov
Back to the Top