In an article by Kristy Eppley Rupon of The State regarding insurance policies along the Eastern coast, a new act by South Carolina’s government has helped quell fears of insurance company lockouts and helped residents secure policies where they may not have otherwise. The legislative act shows there may be some innovation in the Gulf Coast region to keep insurers from leaving like they have threatened to, or have, in other states.
Insurers started dropping policies in late 2006, after Hurricanes Katrina and Rita devastated the Gulf Coast. They were worried about surviving another catastrophic hit.
That put many coastal homeowners in a bind and left state governments scrambling to come up with a solution.
South Carolina’s answer was the Coastal Omnibus Act, which enticed insurers to enter the state’s market and write policies along the coast, Richardson said.
Many states, especially Florida, got heavily involved in the insurance industry, making it hard for companies to operate there and make a profit, said Ray Farmer, assistant vice president for the American Insurance Association’s Atlanta regional office.
“South Carolina’s legislation is kind of unique to the rest of the country,” Farmer said. “It keeps the free market at work and relies on that instead of state-funded programs.”Several other states are now pulling from South Carolina’s plan to mold their own reform acts, Farmer said.
The plan gives tax incentives to homeowners to make their homes stronger, for example, by reinforcing roofs and putting shutters on windows, Richardson said.
Such governmental action to call upon the citizens to take action to better protect themselves not only relaxes insurers but demonstrates a self-reliance that keeps the government from being a consistent fail-safe. It would be great to see this sort of reform act pop up in other states to keep insurance companies around and providing good coverage in an area that desperately needs it.