South Carolina flood insurance

Why South Carolina homeowners need flood insurance

South Carolina’s location means it is regularly in the path of tropical storms and hurricanes, which often lead to flooding. According to data from the Federal Emergency Management Agency (FEMA), every county in South Carolina has experienced a flood event. Coastal homes usually face the highest risk, but strong storms can damage inland properties, too. For example, an estimated 188,329 single-family homes in Charleston and 183,757 homes in Myrtle Beach are at risk of sustaining flood damage from a storm surge, per the Insurance Information Institute.

Looking back at the last several decades, South Carolina has been no stranger to catastrophic flooding. In October 2022, Hurricane Ian made landfall in South Carolina as a Category 1 storm, causing more than 63,000 homes and businesses to lose power.

In addition, some South Carolina homeowners need flood insurance to satisfy the requirements of a mortgage. Lenders often require homeowners with properties in high-risk flood zones to carry flood insurance until their mortgage is paid off. Even if flood insurance is not required, many South Carolina homeowners elect to buy this type of coverage anyway.

Cost of flood insurance in South Carolina

Flood claims paid by the National Flood Insurance Program (NFIP) averaged $52,000 in 2019 (the most recent year data is available). Meanwhile, the average annual NFIP flood insurance premium is $700.

To calculate flood insurance premiums, the NFIP uses several factors to assess risk, including:

• Location: Coastal properties may cost more to insure because they generally have a higher flood risk. Factors such as a property’s elevation or its risk of mudslide damage may also play a role in the cost of flood insurance.
• Loss history: If your home has a history of flood claims, you may pay higher flood insurance premiums.
• Replacement cost: As with homeowners insurance, your home’s replacement cost plays a role in how much you will pay for flood insurance. NFIP residential building policies cover a wide range of your home’s elements, including electrical and plumbing systems, foundation walls, kitchen appliances and solar energy equipment. Higher replacement costs generally lead to higher flood insurance premiums.
• Type of property: Flood insurance premiums are often assessed differently for residential and commercial buildings. The NFIP offers up to $250,000 in building coverage and up to $100,000 in contents coverage for residential properties. You must buy building and contents coverages separately.

In October 2021, FEMA began implementing Risk Rating 2.0, a simplified risk rating plan that calculates flood insurance premiums based on factors such as flood frequency, flood types, distance to a water source, home rebuild costs and elevation. The goal of Risk Rating 2.0 is to make flood insurance premiums fairer by setting rates based on a homeowner’s unique flood risks. However, some private insurance companies also offer flood insurance with regulations that may be different from the NFIP.

When to purchase flood insurance

If you wait until a hurricane or tropical storm appears on the radar to buy flood insurance, you might be too late. NFIP policies have a 30-day coverage waiting period. However, there are some exceptions. The 30-day waiting period does not apply, for instance, when you refinance your home, when you extend or increase the coverage of an existing flood insurance policy or if your home floods as the result of adjacent federal land laid bare following a wildfire. The waiting period is also waived if you buy flood insurance on a property you just purchased.

For a policy that covers a property located in newly designated high-risk flood areas, the NFIP applies a one-day coverage waiting period, but only when the policy is purchased within 13 months of the designation. To check if you qualify for this one-day coverage option, you can enter your address in the FEMA Flood Map Service Center.

NFIP policies feature a one-year term, which you can renew to continue coverage. They also feature a 30-day renewal grace period. The NFIP may pay claims for covered losses that occur during the grace period, but only if you pay the renewal premium before the grace period ends.

Private insurance companies that offer flood insurance may have different regulations than the NFIP.

How to purchase flood insurance in South Carolina

To purchase flood insurance in South Carolina, you may want to ask your homeowners insurance company if they offer flood coverage. Alternatively, the NFIP website features a flood insurance provider lookup tool.

Currently, dozens of carriers sell flood insurance policies in SC, including major companies such as Allstate, Auto-Owners, Liberty Mutual and South Carolina Farm Bureau Mutual Insurance Company.

If you need more coverage than an NFIP policy can provide, consider buying private flood insurance. Private flood insurance policies may offer different coverage limits and rates than the NFIP, so it is worth the time to compare quotes.

When you purchase flood insurance, you are usually required to pay your premium up front and in full. This differs from homeowners insurance, which can often be paid for in monthly installments.

According to the NFIP, a few ways in which you can save on flood insurance are by paying a higher deductible, providing an elevation certificate for your property, implementing certain flood-mitigation strategies and checking whether your community is enrolled in a community rating system.

Frequently asked questions