Unlikely Homeowner Dropped By Insurance Company!
By Gerri Elder
One of the last people you would ever expect to be dropped by their homeowners' insurance has been dropped by their carrier.
Scott Richardson lives in coastal Hilton Head Island, South Carolina and he happens to be the state's insurance director. He recently received the dreaded letter from his insurance company that thousands of other coastal residents have, letting him know that his homeowners insurance was being dropped.
Richardson, who was a state senator, was appointed in February by South Carolina governor Mark Sanford to the position of state insurance director. His top priority was to deal with the insurance crisis of coastal homeowners that has happened since Hurricane Katrina demolished New Orleans and the surrounding coastal areas in 2005.
The irony of the situation is not lost on Richardson, but he is taking the news fairly well. He said, "I guess it just proves nobody's immune. If I'm not immune, then nobody is. I'm shopping for insurance, too."
Richardson jokingly said that it may be time for him to taste his own medicine; however, he may not be joking for long. In July, his department announced that beginning October 1, 2007 homeowners who have been cancelled and been forced to get insurance through the state-regulated South Carolina Wind & Hail Underwriting Association, will be paying on average, 35 percent more for their coverage.
The South Carolina Wind and Hail Underwriting Association is commonly referred to as the wind pool and is intended as last resort coverage for homeowners who can not get coverage elsewhere.
Richardson noted, "I might be in the wind pool before you know it."
A Florida program similar to the wind pool was created in 2004 and quickly insured 1.3 million homeowners. Due to the program, the state-run insurance provider became Florida's largest property insurance provider. Richardson and Sanford do not want this to happen with the South Carolina wind pool.
News of Richardson's cancellation is little consolation to others who have also received notice from their homeowners' insurance companies.And for those who have not been cancelled yet, it just goes to show that no one near the coast is safe from the cancellations.
Other homeowners say they are desperate for something to be done about the rising costs of homeowners insurance and the inferior coverage obtained through the wind pool.
Richardson and Sanford are trying their best to get something done for the coastal homeowners.They proposed a package of coastal insurance reforms that was approved by the state legislature in June.
The package provides tax breaks for insurance companies who will provide homeowners with coverage in the wind pool areas.It also will give tax breaks to property owners who set up special catastrophe savings accounts or reinforce their homes to withstand storms.Also under the insurance reforms the areas eligible for wind pool coverage will be expanded and insurance cancellation notices will be extended to a minimum of 90 days for policies that provide coverage for hurricane season.
Richardson also assures coastal South Carolina homeowners that more insurance reforms and legislative proposals are in the works and will be announced in the next few weeks.