Two months after the S.C. Department of Insurance director said she planned to move the wind pool line, no change has been made.
That's because insurance - though pricey - is still available on the Grand Strand, said Director Eleanor Kitzman.
Local condominium owners, meanwhile, struggle to pay as much as seven times more than what they paid a year ago for property insurance.
Kitzman's inaction has a lot of people frustrated, including legislators, insurance agents and homeowners.
Some lawmakers are calling for her position, now appointed by the governor, to become an elected position. Some are also suggesting changes to the wind pool statute, which Kitzman says bars her from expanding the wind pool just because prices jumped.
Opinions differ on whether the wind pool would actually lower rates. Some say it could increase rates on wind coverage.
A financial shock
Local homeowners who heard Kitzman speak Aug. 28 in Myrtle Beach hoped wind pool expansion would offer relief. It never happened.
"I was shocked. That's the first thing that ticked me off is that she hasn't moved the wind pool," said Ray Hester, who's paying $3,900 for his condominium association insurance this year on top of his regular monthly homeowners association fee of $184 at Sweetwater. He paid $520 for association insurance for his three bedroom condo last year.
Local legislators who also expected the line to be moved say making making the insurance commissioner an elected position would make it more responsive to the public.
"There needs to be accountability. This is a consumer crisis," said Sen. Luke Rankin, R-Myrtle Beach. "You can't make the case any louder or clearer than those folks did who appeared in August [at insurance seminars] and to tell them one thing and then to quietly change your mind. She has and can do better. The position requires more of a consumer-friendly treatment."
Kitzman, however, says she can move the wind pool only "because of the unavailability of coastal property insurance ... on a reasonable basis through normal channels."
She said she doesn't have the authority to act on the basis of price, and there is more insurance available than two months ago.
"When I was in Myrtle Beach, I said we were finalizing our report but that the preliminary report was the [insurance] market had deteriorated significantly and rapidly. My concern was the demand for insurance would continue to grow but new insurance capacity wasn't going to be there, which would create a lack of availability for me to expand the wind pool," Kitzman said.
"While the market is tight, I think that coverage is available through the surplus lines market even though it is expensive," she said.
Since companies started limiting the number of wind policies they're writing, most condominium complexes have only been able to find wind coverage through the excess or surplus line carriers, also called non-admitted carriers because their prices are not regulated through the state.
That more expensive coverage forced Grand Strand retirees Ray and Judith Hester to return to work to pay their increased insurance costs.
Judith has taken a part-time job at Costco. Ray is searching for a job where he can work when his wife isn't using their one car.
"We just retired here two years ago. We keep a little something back because with a condo you know there may be assessments," Ray Hester said.
But he never anticipated a 650 percent increase.
Now, 30 percent of the Hesters' retirement income is going to insurance and they're working to cover the cost.
Nothing to do but wait
Like many Grand Strand homeowners, the Hesters are worried that they may have to wait until the General Assembly convenes in January to see action. They're also concerned that prices could rise even more next year.
"Of course we need more insurance companies writing in South Carolina - apparently that is the governor's strategy and thus Director Kitzman's - but that's a long term help. We, the poor and retired and businesses need help now, before another year of $3,900 assessments," Ray Hester said.
Gov. Mark Sanford said he wants until January to wait to make a decision on the wind pool because that's when the reinsurance market - the insurance that insurance companies buy - readjusts its rates.
"We're very open to expanding the wind pool, but people need to understand, even if we expand the wind pool tomorrow, it's a three-month process before it could have any impact on rates," said Joel Sawyer, Sanford's spokesman.
If the wind pool needs to be expanded in January, Sawyer said Sanford would do whatever is necessary to make it happen, including changing the statute.
Changing the wind pool statute may be the first of many potential legislative solutions, said Sen. Dick Elliott, D-North Myrtle Beach.
"Maybe we find her hands are tied and we need to free up that department," Elliott said.
Will enlarging the pool help?
Even if the wind pool is expanded, there's no guarantee rates would drop.
The wind pool - S.C. Wind and Hail Underwriting Association - offers wind coverage to those east of U.S. 17 Business in Horry and Georgetown counties when it is not available through the standard market.
Kitzman says expanding the territory farther inland would increase availability, but would not lower rates because the wind pool purchases reinsurance just like other insurance companies and must charge a market rate.
Nonetheless, it's a favored solution among local agents.
Two months ago, 90 percent of the Independent Insurance Agents of Horry and Georgetown Counties supported expanding the wind pool.
"Everybody in our organization is still in favor of expansion to at least the Intracoastal Waterway," said Tim Baxley, principal of Statewide Insurance Group in Myrtle Beach and president of the insurance agents group.
And while it won't lower rates right away, Baxley contends expansion would bring more carriers into the market and eventually drive down prices. But he says it may increase rates the wind pool would charge.
How available is insurance?
While Kitzman says the Grand Strand market has property insurance available, the department doesn't have a computer system to keep track of how many companies or which companies are writing insurance on the coast.
The way they know who is writing on the Grand Strand is through surveys and discussions with agents, said Ann Roberson, department spokeswoman.
Independent insurance agent Tommy Cook, owner of John T. Cook & Associates in Myrtle Beach, said he believes rates are stabilizing because of more availability.
"I just met with some homeowners ... I told them that had they asked me what the director would do two months ago I would have said she's definitely going to expand. Now, I would say she's probably not," Cook said.
That's because an increasing number of non-admitted companies such as syndicates of Lloyd's of London and Lexington Insurance Co. are writing more policies than they were two months ago, Baxley said.
But the market still hasn't seen the return of standard carriers - those that are regulated by the state.
And even though more non-admitted carriers are writing policies, it's not enough to help rates decline, Baxley said.
"Availability is still a problem," he said.
"Affordability is the real problem. People don't want to pay 600 to 700 percent rate increases. We are not seeing anything get better yet."
Baxley added that the new non-admitted companies entering the market are charging the same high rates as those already writing.
Local lawmakers are looking beyond changing the wind pool statute to lower the spiraling cost of property insurance.
Among ideas, said Elliott would be requiring insurance companies to operate in all of South Carolina, not just "cherry pick" certain areas.
And a self-insurance pool where prices could be driven by losses within that pool should also receive consideration, he said.
Insurance agents also see the need for changes to the wind pool.
Cook, for instance, said the wind pool needs to offer replacement cost on more than just primary residences and increase the maximum commercial exposure to more than the cap of $2.5 million.
"That's not nearly enough for many of my commercial clients," he said.
A local survey of independent agents found all agents favor adding replacement cost on commercial lines - which would cover condominium complexes.
About 75 percent favor increasing maximum coverage limits, Baxley said.
And there is still the notion of changing the insurance director post to an elected spot like North Carolina and Georgia. Supporters of that move include Elliott, Rep. Tracy Edge, R-North Myrtle Beach, and Rankin.
"When you make a political appointment, that person only has to please those that appoint them. But if they're elected they've got to look at everyone [the public and the insurance industry]," Elliott said.
It's not an option Sanford likes. Sanford's spokesman Sawyer said that's because rates are kept artificially low in states with elected commissioners, resulting in litigation that the taxpayer has to pay for when insurers want to raise rates.
Edge also wants to find a way to more closely monitor insurance rate shifts.
John Ruoff, research director at S.C. Fair Share, a consumer advocacy group, said the actions of the Dept. of Insurance have made it clear that it focuses more on attracting insurers than on regulation and consumer interests. "That's fine when there are [available insurance] markets. But where they aren't markets, the consumer gets done in," Ruoff said.
The Hesters, meanwhile, won't give up the fight. Ray Hester has written his legislators, Kitzman and Sanford.
"If I thought this would come back to a reasonable $1,500 [a year], that would be fine. But if this is here to stay, I just don't know," he said.