Buying a beach home: These Myrtle Beach area communities face high risk of flooding

Whether it’s a $6,000 or $500 annual premium, rising flood insurance costs have put serious financial pressure on Myrtle Beach area residents who live in a high-risk flood zone.

Michael Peterson’s flood insurance policy has almost doubled since he moved to Surfside Beach five years ago, although he hasn’t dealt with flooding. Peterson said he would cancel his policy if he wasn’t paying a mortgage.

He is one of many residents along the Grand Strand that are often facing similar decisions: Go without flood insurance and risk their home or pay thousands in bills in insurance premiums.

Flood insurance is required for residents with a federally-backed mortgage who live in Special Flood Hazard Areas (zones A & V). The National Flood Insurance Program, operated by FEMA, has historically offered government subsidized flood insurance policies to reduce the financial risk of flooding by requiring strict floodplain management standards.

While Peterson’s premium is not as high as others’, now just under $1,000, he is retired and living on a fixed-income.

“It slowly eats away at you,” he said.

Peterson said even if he did have flood damage, he wouldn’t file a claim unless it was catastrophic to avoid paying even higher premiums. Regardless, he fully understands that he either pays for the policy, whatever it may end up costing, or he can’t live there anymore without paying off his mortgage first.

As researchers warn about increased severe weather events, premiums are increasing to better reflect the risk. But residents who haven’t experienced flooding are frustrated by the annual price jumps as they try to protect their piece of coastal paradise.

What does flood insurance cover, and why have premiums increased?

The NFIP covers up to $250,000 for the structural damage and $100,000 for contents. Private flood insurance, a fairly new option in comparison to the 1968 inception of the NFIP, typically offers more coverage and different pricing options for owners who want more protection than a standard policy.

Flood insurance premiums used to be based on what flood zone a home was located in and the elevation of the property. Until 2021, homes in the same type of flood zone paid similar premiums because specific characteristics like types of flooding, flood frequency and distance to a water source were not considered. Since then, FEMA has assessed homes based on a new model, called Risk Rating 2.0.

The NFIP owed $22.5 billion to the Treasury as of Dec. 31, 2025, meaning the program paid out more in claims than it was receiving in policy premiums. Risk Rating 2.0 attempts to match premium to risk.

“Previously, some policyholders with lower-value homes paid more than their actual risk warranted, while those with higher-value homes often paid less,” a FEMA spokesperson said. “While some policyholders experienced premium increases, hundreds of thousands of single-family homeowners are now paying less than they did under the legacy system.”

In 2024, South Carolina had 198,232 NFIP policies with an average annual premium of $695. In 2025, the number of policies fell to 193,541, but the average premium jumped to $743, according to annual reports from the SC Department of Insurance.

South Carolina has a cheaper state average than surrounding coastal states that has attracted residents. However, according to data from FEMA, the highest average coastal payment among the southern Atlantic states, excluding Florida, was in Pawleys Island.

FEMA data indicated the average annual payment for a policy in Pawleys Island was $4,199 in 2025. Georgetown was $2,078, and Surfside Beach was $1,216. The data does not factor rates from private insurers.

NFIP policies in force prior to 2021, when Risk Rating 2.0 began, are on a glide path. For polices that increased, their rates will continue climbing up to 18% to 25% a year until they reach their full, risk-based rate.

Lisa Sherrard, an agent for Choice Flood Insurance, said a current $2,000 premium with a $10,000 statutory discount could at some point pay up to $18,000 a year because of the gradual increases. Post-RR2.0 policies that are already at their full risk-rate are going to increase up to 18% a year to adjust for inflation, she said.

“If this is your forever home, you need to look at what the cost of flood insurance is going to be,” she said.

Private flood insurers do not have a cap on price increases and can raise prices as they see fit. Sherrard said some policyholders switch back to the NFIP after realizing the frequent jumps. She has also seen policyholders cancel their flood insurance after paying off their mortgage to shake the extra cost, but she worries those policyholders don’t fully understand the risk.

What is Horry County’s true flood risk?

While FEMA maps and flood insurance rely on historical data to determine risk, First Street considers the impacts of climate change in its analyses. First Street Flood Model assesses flood risk across the country at a property level and does not determine risk solely by flood zone.

Communities like Cherry Grove Beach face an extreme (highest) risk of flooding over the next 30 years, according to First Street. North Myrtle Beach, Briarcliff Acres, Surfside Beach and Murrells Inlet face major risk.

Nearly 27,000 properties within Horry County have a major, severe or extreme risk of flooding. Only 19,250 are mapped in A and V flood zones, which prompt flood insurance coverage with a mortgage.

Horry County has a moderate risk, with nearly 40,000 properties at risk of flooding in next 30 years, which make up only 18% of the county’s properties.

During Hurricane Florence in 2018, over 16,000 properties were impacted by flooding. Hurricane Matthew damaged more than 13,000 properties in 2016.

According to South Carolina’s resilience and risk reduction plan completed in 2023, the low-lying nature of the state’s coastlines makes them more prone to compound flooding, or a combination of extreme tides, storm surge, heavy rainfall or riverine flooding.

In these areas, major damage is often associated with high tide flooding, which has increased in the U.S. by about 50% in the last 20 years, according to the state’s plan.

Residents are paying the price (literally) of living in coastal flood zones

Mary Etta Williams of Garden City owns her home and is not required to carry flood insurance, but she has experienced four floods in the last 11 years. Her NFIP policy has increased to a whopping $6,150 annual premium.

She has remodeled the first floor of her home to reduce flood damage. She even began storing her furniture off the property during certain months of the year, but since doing so she hasn’t had a flood.

Her options to avoid the high price of flood insurance have dwindled to cancelling her policy and risking costlier flood damage or moving off the inlet.

“I don’t want to do that,” she said. “It’s worth the gamble.”

As flood insurance gets closer to a cost only some can absorb, the question for many Grand Strand homeowners is whether they can afford to stay on the coast long enough to find out if it was worth their investment.