Pool Politics

Mississippi and South Carolina in particular grappled with coastal woes by working to make insurance from their state’s wind pools more accessible without having these insurers of last resort displace willing private insurers.

South Carolina struck a balance by granting some pool rate increases, raising deductibles and opening the pool to some new counties. At the same time, it was granting tax breaks for insurers for writing on the coasts and for property owners for making homes more hurricane resistant. Another provision allowed homeowners to put money into tax-deductible hurricane savings accounts.

Since 2005 and Katrina, rates charged by Mississippi’s wind pool have jumped 268 percent for businesses and 90 percent for homes. Lawmakers looked for ways to provide rate relief. In March, they agreed upon a plan to use $20 million a year in premium taxes on policies statewide to help lower premiums for property owners insured by the wind pool. The plan includes tax incentives to encourage insurers to write more coastal policies. The state is also using $30 million in federal funds to help pay for the rate relief. Still, the wind pool raised rates by 142 percent — but that was about 100 percent lower than the originally filing.