Flood insurance demand in SC recedes as development pours in

A financial lesson of storms past has gone largely unheeded in the Palmetto State.

It appears to have come down to a matter of dollars and cents. 

Property owners in South Carolina aren’t lining up to buy the specialty insurance they’d need to file a claim and rebuild after a bout of water damage, the kind that Tropical Storm Debby already has inflicted last week and may still inflict as creeks, streams and rivers rise and crest.

The upshot is some households could get soaked in more ways than one.

The latest government figures show the number of subsidized federal flood policies sold across the state is lower than it’s been in recent memory, even as residential and commercial development has exploded up and down the coast.

A succession of destructive downpours since 2015 hasn’t been enough to keep the needle from slipping.

As of July 31, the number of South Carolina policies in the national coverage pool of about 4.6 million fell by 2,600, or 1.4 percent, from the same day a year ago, according to a monthly spreadsheet from the Federal Emergency Management Agency, which oversees the National Flood Insurance Program.

The latest total is 199,324, equal to about 8 percent of all residential properties around the state. The figure, which exceeded 204,000 in 2018, slipped below the 200,000 level last month.

The government has been the primary underwriter of flood insurance since the late 1960s, when borrowers of federally insured mortgages with homes in high-risk areas were required to buy a policy to cover flood damage. More recently, private carriers have been getting back into the market.

Premiums can range from hundreds to thousands of dollars annually, with a maximum $250,000 payout from the government, plus another $100,000 for contents. The buy-in restrictions include a 30-day waiting period, making it too late for Debby’s victims.