Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Economy

Hurricane Idalia Is About to Hit Another Insurance-Starved Region

Georgia and the Carolinas are about to get hit. Like Florida, they’re having insurance problems.

•
A hurricane with a Ben Franklin eye.
Heatmap Illustration/Getty Images

While Hurricane Idalia missed heavily populated areas of Florida, the storm, along with the wind and rain that accompanies it, is bearing down on Georgia and the Carolinas. While these states have avoided a full-scale insurance crisis like the ongoing one with Florida, they have dealt with higher rates, shrinking policies, and expanded risk, especially in coastal areas.

The storm is currently around the Florida-Georgia border and coastal areas from Savannah to Myrtle Beach to Wilmington are in its cone, according to the National Hurricane Center. Savannah is under a storm surge warning, while Myrtle Beach and Wilmington are under a flood watch.

While the National Weather Service has warned that the “main impact” will be rain and flooding, it has also cautioned that “Isolated tornadoes are also expected, mainly along the coast. Tropical storm force winds may cause downed trees and power outages. The highest chance of wind-related impacts will be along the coast.”

It’s this kind of damage that’s likely to exact a toll on an already strained insurance market up and down the southern Atlantic coast.

The area is popular with vacationers, second-home owners, and retirees, and experienced an influx of Covid-era migration. This region is one of the most economically exposed to damage from climate change, according to Moody’s Analytics. “Among metro areas, large coastal economies bear by far the most risk. Nowhere is this more pronounced than along the Carolina coast, with the stretch from Jacksonville, North Carolina, to Charleston, South Carolina, facing the greatest threat,” Moody’s wrote in a report.

Already, before the storm, insurers were asking for large rate increases from state regulators, including a 50 percent bump in so-called “dwelling” policies in North Carolina (these are policies specifically for homes not occupied by their owners, which insurers often charge heftier premiums for). Coastal North Carolina is no stranger to hurricane damage, Hurricane Florence, which made landfall near Wilmington, killed 42 people and caused over $16 billion worth of damage in 2018.

Some condominium owners in Hilton Head have even seen 500% premium increases for their buildings’ master insurance policies. Homeowners insurance, especially on the coast, is such a severe problem in South Carolina that the state even has a tax credit for homeowners whose premiums are over 5 percent of their incomes. And in Myrtle Beach, some homeowners told WBTW that they had seen 25 to 40 percent hikes in their home insurance. In 2021, South Carolina lost FedNat Insurance, after it pulled out of several southern states due to the losses it took thanks to catastrophic weather.

In Georgia, homeowners insurance premiums have increased in the last year, which Steve Manders, Georgia’s deputy insurance commissioner, blamed in an interview with WABE on supply chain issues, which make repairs more expensive, and the rising costs of reinsurance, which is essentially insurance for the insurance companies.

Reinsurance costs rise when insurance companies across the industry have to make large payouts, like in the case with increasingly damaging extreme weather. “Reinsurance costs have gone up over the past several years, that is compounding the catastrophic issues we’re seeing on the claims side,” Manders told WABE. “I do not see a slowing down,” of rising homeowners insurance costs.

The first half of this year “featured above average natural catastrophe losses,” according to the insurance broker Gallagher and the past six hurricane seasons “brought insurance carriers notable upward pressure on the cost of purchasing reinsurance cover.” Reinsurers were raising rates by 25 to 40 percent, according to Gallagher.

One coastal South Carolina resident even told WPDE that she blamed “California's problems with the fires and hurricanes that don't affect us” for the higher insurance premiums her homeowners association was paying. That area is currently under a flood watch and tropical storm warning.

Green
🔒

You’ve reached your free article limit

Subscribe to Heatmap News for unlimited access to daily energy and climate coverage.
To continue reading
Create a free account or sign in to unlock more free articles.
or
Please enter an email address
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
AM Briefing

Trade Winds

On Finland’s nuclear waste breakthrough, Israeli fusion, and Lebanese solar

Turbine components.
Heatmap Illustration/Getty Images

Current conditions: Churning off Mexico’s west coast, Tropical Storm Vance is strengthening into the 11th major hurricane to hit the eastern Pacific this year • A magnitude 7 earthquake that struck a remote corner of northeast Tibet killed at least 18 people and injured dozens more • A series of offshore storms in the Atlantic are hammering the East Coast with dangerous swells.


THE TOP FIVE

1. Trump whiffs on tariffs on wind turbine components

President Donald Trump issued a proclamation Thursday declaring that imported wind turbines and their parts “threaten to impair the national security of the United States,” affirming the findings of an investigation the Department of Commerce opened last summer. But the White House stopped short of imposing the tariffs the agency recommended. It’s tempting, of course, to interpret the White House’s decision to punt on tariffs as a concession to win Democratic votes in Congress for the bipartisan infrastructure deal. In keeping with Trump’s famously chaotic negotiating style, the Department of Justice in the past week reopened permitting decisions on two major offshore wind farms while the Pentagon advanced two of the droves of onshore wind projects amid the bureaucratic blockade that has stymied the sector for months.

Keep reading...Show less
Blue
Electric Vehicles

Is There Room for Lucid?

The company is falling into the third-place trap.

Trophies.
Heatmap Illustration/Getty Images

Jason Fenske loved his Lucid. Or at least, the idea of it.

Fenske is the proprietor of the influential Engineering Explained channel on YouTube, which digs into the mechanical minutiae of both combustion and electric vehicles. While he regularly test-drives all sorts of cars, Fenske last year bought himself a Lucid Air, the big, beautiful sedan from the California EV startup.

Keep reading...Show less
Yellow
A data center.
Heatmap Illustration/Getty Images

This is Heatmap Daily, a weekday digest written by our executive editor. Subscribe here.

My colleague Emily Pontecorvo has a fascinating story today about Net Power, an energy and power development company whose technology once seemed key to decarbonizing the country’s electricity grid.

Keep reading...Show less