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Mount Pleasant SC Homes for Sale, Mount Pleasant SC Real Estate for sale, Mount Pleasant SC Condos, Mount Pleasant SC Homes for Sale Listings, Charleston SC Fractional Homes for Sale
Charleston Condo Insurance On The Rise!Charleston Condo Insurance On the Rise! The homeowners association board at The Retreat, a condominium complex on James Island, sought to renew its insurance for the 264-unit development off Folly Road.
What they were told left them dumbfounded. Wind and hail coverage for the buildings and common areas at the three-year-old property would cost a staggering $450,000. The same insurance cost $46,000 last year. Some homeowners worry they could face foreclosure. The skyrocketing rates, on top of mortgage payments, utility bills and other expenses, also might deter prospective buyers and cause property values to fall. The Retreat has a total operating budget of $560,000, and for this fiscal year its board didn't expect to pay more than $200,000 for all of its insurance coverage. To help make up for the unexpected wind-and-hail increase, owners already have been hit with a $1,000 special assessment fee. But that's just a short-term fix. Owners at The Retreat are not alone. Other area condo complexes also have seen rates jump, in some cases by more than 400 percent. Homeowners at Wildwood Town Homes in Charleston were notified recently that their rates will jump to $106,000 from $21,000. On the Isle of Palms, rates at Ocean Palms condos have doubled, going from $46,000 to $92,000. At nearby 1140 Ocean Blvd., rates shot up to $195,000 from $95,000. Outside Charleston, coastal residents have flocked to public meetings to vent their frustrations and listen to insurance officials explain the mind-boggling pricing system. Two forums in Myrtle Beach drew hundreds of residents, mostly condo owners. Eleanor Kitzman, director of the S.C. Insurance Department, told them most of the biggest increases are coming from insurers that the state does not regulate. Losing sleep Meanwhile, short of selling their properties, many Charleston condo owners have no choice but to foot the bill for their mounting insurance premiums. The impact could be far-reaching. Affected property owners will have less disposable income to spend at area businesses, said the president of the homeowners association at The Retreat. With roughly 800 residents living at that complex alone, that adds up, he said. The board used every cent it had just to make a down payment on the policy, he said. Owners then were given two months to come up with $1,000 each to help replenish the kitty. Harvey said 17 condos are now for sale at The Retreat, compared with seven before the assessment. Gone with the wind The insurance industry has suffered heavy losses after consecutive destructive hurricane seasons. The storms ravaged Southeast coastal communities, where properties enjoyed some of the real estate boom's steepest appreciation. During the past 16 years, insurance companies paid out $1.16 for every $1 they received in premiums, according to the industry-backed Insurance Information Institute in New York. Insurance giant Allstate, the nation's second-largest insurer, has stopped writing policies for new businesses up and down the East Coast, including the Charleston area, based on the exposure it already has. The company blames, in part, higher material and construction costs, as well as the more active tropical storm seasons. Nationwide said it will shift 1,900 policies to the S.C. Wind and Hail Underwriting Association, known as the wind pool, a state-backed insurer of last resort against wind damage. The policies represent 10 percent of Nationwide's coastal customers in South Carolina. Since 2001, the number of wind pool policies has increased 225 percent, and by nearly 96 percent over the past 12 months. The pool now has $10 billion in insured losses, 155 percent more than five years ago. This year, the top insurers that are regulated by the state were granted premium increases in the 6.5 percent to 7 percent range when averaged across South Carolina, with increases in coastal areas of 20 percent to 25 percent, according to Insurance Department data. The wind pool raised its rates by 4.8 percent this year. Condo projects are seeing the highest increases because fewer companies are willing to underwrite the large policies those developments require. For properties that state-regulated insurers don't want, and for those outside wind pool territory, the only alternative is what's known as the surplus market. Carriers that serve that market, such as Lloyd's of London, are not regulated by the state. And because they write policies no others will touch, typically for large coastal properties, they charge the highest premiums. Now is later All the while, developers still flock to the coast. Reverie on the Ashley, an 88-unit condo project on the Ashley River in North Charleston, is in its third phase of sales. The Battery at Park West, a 224-unit development in Mount Pleasant, is under construction. Work continues at the 108-unit Bee Street Lofts in downtown Charleston. Much of the new construction is not within the wind pool territory, which covers a relatively small area of the coast. But without insurance, buyers cannot close when buying a home.
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