Number of insurers in state on rise

Free market credited; firms mostly focusing on niche areas

Maintaining a free market for insurers, rather than creating a state-backed program as Florida did, has helped South Carolina attract nearly a dozen carriers during the last year, the state's insurance chief said Tuesday.

Pure High Net Worth Insurance

In many cases they are lesser-known companies that are focusing on niches in the market, rather than blanketing the state with policies ranging from homeowners to auto coverage.

By controlling their exposure, these companies say they can offer coverage to property owners in places some of the country's largest insurers have shied away from in recent years.

The state Department of Insurance has approved nine companies to do business in South Carolina during the last year, with two more applications pending. Of those nine, seven are admitted carriers, meaning their rates are regulated by the Insurance Department.

Also, four of the nine have said they will write property and casualty business along the coast. Of the two companies with licenses pending, one will write coastal coverage.

Two of the new companies will specialize in what have been some of the tightest sectors of the market in recent years.

Pure High Net Worth Insurance, based in Plantation, Fla., will specialize in properties that are worth more than $1 million, including those along the coast, and are at least 3,000 square feet. The company will offer comprehensive coverage, including windstorm coverage, for large homes that meet the latest building codes.

Bobby Collins, senior vice president and South Carolina general manager with Pure, said the company will inspect all properties before taking on a policy, but large, well-built homes usually withstand storms better than smaller, less well-built houses.

The company is selective about the type, age and construction of a house, so it can specialize in areas that other insurers won't touch, Collins said. "In the long run, when you have better risk you pay less premium," he said.

Another new company, HomeWise Preferred Insurance Co. of Tampa, Fla., sees opportunities in Charleston's older and historic homes. The company, which will inspect each property individually, will place its faith in strong underwriting, said Linda Philipps, vice president of business development with HomeWise.

"Our strategy is to write in catastrophe-prone areas," she said.

The influx of insurers to the state is due in large part to expansion last year of the state's "wind pool" territory, Director of Insurance Scott Richardson said.

The move allowed insurers to exclude wind and hail coverage from homeowners policies they issue within that coastal area and shift that liability to an entity called the S.C. Wind and Hail Underwriting Association.

Last May, when the territory was expanded for the second time in less than six months, Richardson said that approach would help attract more new insurers and encourage incumbent carriers to write more policies along the coast.

Richardson said Tuesday that the policy appears to be paying off.

"We think we are on the right track, realizing that this is an ongoing process and something that we must constantly monitor," he said.

"This is going to be a three-year process to allow enough companies to enter the market and make it competitive."

South Carolina's approach to quelling sharply increasing premiums for homeowners insurance came in stark contrast to moves in Florida, where lawmakers created a statewide insurance program called the Citizens Property Insurance Corp.

Legislation passed last year that heavily subsidized Citizens' rates. In doing so, it discouraged companies from writing business in Florida because the state artificially suppressed prices, private insurers said.

Richardson said South Carolina took the opposite approach and has created more competition for consumers.

The official start of hurricane season is June 1.

Reach Peter Hull at 937-5594 or phull@postandcourier.com.