R Street paper shows South Carolina at low risk of post-storm ‘hurricane taxes’
COLUMBIA, S.C. (March 5, 2013) — While a state Senate subcommittee has been appointed to study home insurance rates in South Carolina, new research from the R Street Institute demonstrates the state’s current system of property insurance regulation has held up well, particularly in contrast to other Southeastern states.
In a new paper, R Street President Eli Lehrer and Senior Fellow Ernst Csiszar, who was South Carolina’s director of insurance from 1999 to 2004, examine how the property insurance market functions in coastal South Carolina, including how insurers determine rates and the roles of statistical modeling and reinsurance.
Lehrer and Csiszar conclude that South Carolina’s regulatory regime is fairly typical and that rates are reasonable, given the risks coastal properties face. They also note that South Carolina taxpayers face lower risks of post-storm assessments than other coastal states, such as Florida, Louisiana, Texas and Mississippi.
While South Carolina could do more to encourage property owners to protect their homes from extreme weather and to attract more carriers to the state, the current system is a rational one that serves consumers well, the paper notes.
“South Carolina’s property insurance market isn’t perfect but it’s pretty good,” Lehrer said. “Relative to other states, South Carolina does a pretty good job protecting its citizens from special hurricane related taxes while giving them a broad choice of insurers. While reforms may well be needed, the market is in pretty good shape.”
To read the full paper, please visit:
http://www.rstreet.org/wp-content/uploads/2013/02/RSTREET9-South-Carolina.pdf
