The Hilton Head Homes Blog

COURTESY OF | Scott Vincini, CLU, CHFC– Callen Insurance Services

It would be natural to worry about the state of the insurance market after a big storm. Perhaps you are asking, is now a good time to get insurance on a Hilton Head real estate investment?

The good news is the insurance market is still very healthy with only modest changes to underwriting standards. Even for those homeowners with losses, catastrophic weather claims do not count against you when shopping for new insurance.

How will the storm affect my home insurance?

There are several factors that go into insurance pricing beyond losses in the local market. For example in 2005, when Hurricane Katrina hit New Orleans, Hurricanes Dennis, Rita and Wilma also hit the U.S. in the same year. The impact on the whole insurance market was significant as insurance companies sought to recoup the losses across all insurance buyers.

Those losses combined with an incredibly low interest rate environment led to what we call a “hard” insurance market. Basically it was a seller’s market where finding coverage at affordable prices was difficult for the buyers as choice was limited.

While Hurricane Matthew caused significant damage in the Hilton Head area, the industry had few losses elsewhere which helps their overall pricing. The insurance market had softened post-Katrina as catastrophic losses moderated. Interest rates are also becoming a positive factor. Though still very low, interest rates are starting to rise which helps the investment results of the insurance companies.

Some observations of the post-Matthew insurance markets:

1. Early estimates indicated only 15% of Hilton Head properties had some damage from the storm.
2. Many of the trees that were past their prime are now removed reducing the risk of future tree damage. Take some extra care to have the trees of any prospective purchase inspected by a licensed arborist to make sure they are healthy.
3. If you are considering a home purchase that had damage, it may have a new roof that provides credits in pricing your insurance coverage.
4. Look for insurance quotes that include hurricane or named storm coverage to be included in the base policy. Many homes are quoted with a separate policy from South Carolina Wind and Hail Pool. While valuable coverage in a hard market, this coverage is typically more limited protection in areas such as replacement cost. Many carriers are again offering named storm or hurricane coverage in a single policy that includes replacement cost.

Owning real estate in our coastal community has been compared to owning a piece of paradise. Protecting this investment requires matching the right company to the property. Work with someone that has knowledge of the local insurance market and you will find the peace of mind you seek.

Interested in learning more about making a home on Hilton Head Island? Take a moment to #contat# to consult a local real estate market expert.