Over the past thirty years, several memorable hurricanes have hit South Carolina: Hugo (1989), Floyd (1999), Bonnie (1998), Charley (2004) and Joaquin (2015). Unfortunately, these hurricanes are memorable to insurance companies as well. It’s why South Carolina’s homeowners insurance is a little higher than the national average.
For more information about homeowners insurance, check out Benzinga’s Best Homeowners Insurance Companies.
The Best Homeowners Insurance in South Carolina
Average Annual Premium in South Carolina
Generally speaking, housing is affordable in South Carolina. The median home value is less than $150,000 compared to over $200,000 nationwide. Home values are often an indication of the type of homes in the state and how much it costs to rebuild them if disaster strikes, which is why we have insurance.
Home insurance rates in the Palmetto State prove it’s not all sunshine and palm trees. As a result of higher risk from storms, homeowners in South Carolina pay an average of $1,240 per year compared to a national average of $1,132. Residents in coastal areas can expect home insurance rates to be higher than the state average.
Finding the Best Premium for Your Home
For most families, their home represents a significant percentage of their net worth. Insurance protects not just the bricks and sticks that your house is made of, but often most or all of your life savings — the time and money you’ve invested in making a house a home.
The trouble is that many insurance policies leave gaps in coverage, exposing homeowners to risks — risks they thought were covered. Finding the best premium for your home means finding the best rate for all the coverage you need, filling those gaps that can cost thousands if your home is damaged.
About 1 in 15 homeowners will file a home insurance claim this year and most of those claims will be for damage to the house itself, falling under dwelling coverage on a home insurance policy. Dwelling coverage pays to rebuild your home, in whole or in part, subject to the coverage limits and deductibles you’ve chosen.
That all sounds pretty good and provides a good reason to sleep well at night, dreaming about palmettos and summer breezes — except that some parts of your home may be only partly covered and some risks to your home may not be covered at all.
With a standard home insurance policy, most of your home is covered for Replacement Cost Value (RCV), meaning your insurer will pay the amount it costs to replace or rebuild the parts of your home that are damaged in a covered claim, subject to coverage limits.
However, if that damaged part is a roof, most insurers provide Actual Cash Value (ACV) coverage, which depreciates the insured value based on wear and tear due to age. Roof claims due to wind and hail are among the most common home insurance claims, which is why so many insurance companies pay actual cash value — and why you need to understand your coverage.
A roof claim for an older roof might pay as little as 25 percent of the replacement cost. Combine that reduced payout with a high deductible, which is the part of the claim paid by the insured, and you might be on your own for the cost to replace the roof. Fortunately, some insurers provide better roof coverage and some even offer discounts for roofs built with wind and hail resistant roofing materials.
If your home is a mobile home, like nearly 20 percent of the homes in South Carolina, coverage for the entire structure will usually depreciate, depending on age. Any claims will be paid at actual cash value.
Single-family homes are usually insured by two common types of policies: HO-2 and HO-3. Other types of policies for specialty homes or with reduced coverage are also available — but the more limited policies don’t provide much protection for homeowners and are reminiscent of the first “fire policies” that pioneered home insurance, which only covered fires. Ideally, you’ll want an HO-3 policy or an HO-5 policy, though these are less common.
An HO-3 policy, also sometimes called an all-risk policy, covers the dwelling for any risk that might befall your home — albeit with a short list of excluded coverages — including war and government action. Floods and land movement are also excluded from coverage. An HO-2 policy, still commonly sold, covers the dwelling for only 16 perils (risks), and has the same exclusions as an HO-3 policy. An HO-5 policy, is similar to an HO-3 policy — but also extends coverage to personal property on an open peril basis, whereas an HO-3 limits personal property to named perils.
|Policy Type||Dwelling||Personal Property|
|HO-2||Named peril||Named peril|
|HO-3||Open peril||Named peril|
|HO-5||Open peril||Open peril|
When you bind a policy or get a detailed quote, your insurer will use specialized software to calculate the cost of rebuilding your home. Most insured homeowners use the calculated rebuild cost as their chosen coverage amount, and there is an advantage in using the calculated figure.
Choosing a higher coverage can result in paying for insurance you don’t need and choosing a lower coverage can expose you to more risk — as well as possible reduced claim payments if you have a claim. If the calculated rebuild cost seems low, ask to review your home details. An important detail about your home may have been missed and you’ll want the calculation to be correct.
Rebuild costs are used in claims to determine insurance to value ratios and to calculate claim payments. Insurance to value, in this case, means the dwelling coverage amount compared to the calculated rebuild cost. If this ratio falls below 80 percent, your claim will be paid at the insurance to value percentage, less your deductible.
|Dwelling Coverage||Calculated Rebuild Cost||Insurance to Value|
|Claim Amount||Insurance To Value||Coinsurance (paid by homeowner)||Adjusted Claim Payment|
In the above example, any claim — regardless of size — will be paid at the insurance to value percentage, which cuts the claim payment by 40 percent in this case. Your chosen deductible will be subtracted from the claim payment as well.
Insuring your home for the full rebuild cost provides enough coverage to rebuild in the event of a total loss and prevents percentage-based claim reductions, called coinsurance.
Sheds, barns, storage buildings, in-ground pools, and fences are all covered by a standard home insurance policy under coverage for other structures. Coverage for other structures is usually assigned a default coverage amount of ten percent of the dwelling coverage amount. A home insured for $250,000 would have coverage for other structures at $25,000.
Depending on the dwelling coverage amount and what type of structures you have on your property, the default coverage may not be enough. You can change this amount if it doesn’t provide enough to rebuild your other structures.
While inground pools have coverage under coverage for other structures, land movement is not covered, a common cause of damage to pools.
Personal property coverage
Your belongings are covered by your home insurance policy as well, but there are some guidelines to coverage that are important to understand. Most home insurance policies cover personal property at Actual Cash Value (ACV), a depreciated value.
Some insurers provide an option to add an endorsement to your policy that changes your coverage from Actual Cash Value to Replacement Cost Value (RCV). Some policies, like an HO-5 policy, even come with replacement cost coverage for personal property as the standard coverage — but these aren’t common. Most policies depreciate the insured value of your personal property due to wear and tear based on age, and this can leave gaps in coverage.
|Personal Property||Cost When Purchased||Actual Cash Value||Replacement Cost|
|Dining Room Set||$1,000||$600||$1,000|
Actual cash value will vary depending on the item and the age of the item, so these are examples to illustrate the potential difference in claim payments. Claims for single items or inexpensive items aren’t common and often won’t be paid because the deductible is higher than the loss amount, but if you consider a covered claim in which several rooms and the content of those rooms are damaged, coverage at actual cash value can leave you without enough money to replace the items damaged in the claim.
In the above example, the replacement cost of the television is lower than the original cost. Replacement cost coverage insures your personal property for the cost of replacement with the same item or a substantially similar item as opposed to your original cost.
Even if a policy has coverage for replacement cost value, the insurer will initially pay the claim at actual cash value. When you submit proof that the item was replaced, the difference between actual cash value and your replacement cost will be paid. This is called recoverable depreciation. Most home insurance policies have non-recoverable depreciation, meaning you’ll never get that second check, but if you shop your options, you can find full coverage for your personal property.
Valuables are another important aspect of your coverage. A standard home insurance policy has coverage limits for certain types of items, such as jewelry, firearms, musical instruments, and others.
Limits for both the type of item and per-item limits are common and can leave massive gaps in coverage if you have high value items.
|Item||Appraised Value||Type Limit||Item Limit||Claim Payment|
In a theft claim with 4 pieces of jewelry worth a total of $10,000 stolen from your home, a standard home insurance policy might only pay a fraction of the loss in a covered claim. Actual coverage limits by type and by item will vary by insurer.
The solution to insure your precious items to their full value is to add them to your policy as scheduled items. Your insurer will require a recent receipt or a recent appraisal. Some insurers use a separate policy to provide full coverage for valuables, called a personal articles policy.
In addition to fully insuring your valuables, scheduled items or items covered on a personal articles policy often have no deductible, which otherwise could take a big chunk out of your claim or prevent the claim from being paid at all.
Personal liability coverage
Your home insurance policy also provides coverage for personal liability due to accidental injury to others and unintentional damage to the property of others. The most common type of personal liability claim is for dog bites, which average over $30,000 per claim but can reach much higher costs. This is why insurers often ask about dogs and even exclude coverage for certain breeds.
Dog bites aren’t the only reason homeowners can have liability. Slips, trips, falls, and other mishaps can all be a source of personal liability. Families with children should be particularly aware of risks when friends come over to play. If Little Johnny gets hurt on your watch, or even if you aren’t home and didn’t know he was at your house, his parents may sue.
Personal liability coverage includes coverage for the medical payments for others — and includes coverage for their pain and suffering and lost wages. In most cases, your legal defense is included with coverage as well. But all coverage is subject your coverage limits and a standard home insurance policy only comes with $100,000 in coverage, a limit easily exceeded in some cases.
You can bump your coverage up to $300,000 for about $20 per year. If you have children — or a pool, consider an even higher limit or an umbrella policy, which extends your liability coverage for both your home and auto policies.
Damage to the property of others is covered as well, so if you accidentally knock down the neighbor’s fence with your riding lawn mower, your insurance can cover the cost of repair or replacement.
Many home insurance policies in South Carolina will have at least three separate deductibles, each for a separate peril or group of perils. The Palmetto State is among 19 coastal states (plus Washington, D.C.) that have a separate deductible for damage due to hurricanes or named storms.
The inclusion of named storms means the hurricane deductible, as it’s commonly known, will apply even if the cause of damage was only a tropical storm. Deductibles of any type are the part of the claim paid by the insured policyholder. Hurricane deductibles are usually set at a percentage of your dwelling coverage amount between 3 and 5 percent.
Separate deductibles apply for wind and hail or all other covered perils.
|Claim Type||Dwelling Coverage||Claim Amount||Deductible||Claim Payment|
|Named storm (5%)||$200,000||$20,000||$10,000||$10,000|
|All other perils||$200,000||$20,000||$1,000||$19,000|
If the damage to your home is from a named storm, the wind and hail deductible would be superseded by the named storm deductible, so you pay one deductible — but a much larger one. Some insurers use percentage based deductibles for wind/hail and all other perils as well, so be sure to ask your agent how the deductibles are structured on your policy.
Choosing a higher deductible for wind/hail or all other perils lowers your insurance rate because it lowers risk for the insurer by reducing the number of paid claims and total claim payouts. Named storm or hurricane deductibles are generally fixed percentages — but the required percentage can vary from one insurer to the next, or by area. When choosing a deductible amount, pick a realistic number that you can afford to pay.
Discounts can help bring premiums under control and help offset any increases in coverages or options you’ve added. The most common discount is a multiple policy discount for bundling both home and auto insurance from the same insurer.
You might even get an extra discount for adding a third or fourth policy, such as an umbrella policy or life insurance, but any discounts from these extra policies are more likely to be applied to your auto insurance premium than your home insurance premium. Bundling home and auto can create a discount as high as 30 to 35 percent on your home insurance policy with some insurers.
Common home insurance discounts:
- Multi policy discounts
- Home safety features
- Senior discounts
- Loyalty discounts
- Discounts for affinity groups, union members, or government employees
- Alarms and home security
- Claims free discount
- New home buyer discounts
- Green home discounts
- Discounts for hail and wind resistant roof construction
- Welcome discounts
- Pay in full or auto pay discounts
It’s likely that you’ll qualify for more than one discount, and often staying with an insurer for a few years will give you access to more discounts, particularly if you remain claims-free. Be aware that some discounts aren’t built to last forever; early signing discounts, welcome discounts, or new customer discounts tend to disappear after two to three years.
Inclement Weather in South Carolina
Residents of frigid northern states daydream of relaxing in a hammock between two palm trees swinging gently beneath the South Carolina sunshine. That is, unless their relaxation is interrupted and they have to take cover from tornadoes, evacuate due to a hurricane, fall into a massive sinkhole, get pelted by hail, or get carried downriver by raging floodwaters.
Weather in the Palmetto State is absolutely perfect most days, but Mother Nature can change her demeanor quickly, creating risk for people, homes, and personal property.
South Carolina is generally warm, but snow and freezing weather are still a concern in winter months. Wildfires are also worrisome in some rural areas, but most risk to homes in South Carolina comes from water and wind — and all the trouble that come with them.
Parts of South Carolina get up to 70 inches of rain annually, more than double the national average. As heavy rains pass through, or sometimes linger, they create new risks: flooding and land movement, neither of which is covered by a standard home insurance policy.
Land movement, an excluded coverage even on “all risk” policies, includes sinkholes, settling, mudslides, and earthquakes. Some insurers offer an option to add land movement coverage as an endorsement to your existing home insurance policy. In other cases, you’ll need to purchase a separate policy if you want coverage.
In 2016, the National Flood Insurance Program (NFIP) paid nearly $140 million to insured homeowners in South Carolina — to those who had flood insurance. Others had to bear the cost of damage on their own. There were less than 6,000 NFIP flood insurance policies in force in South Carolina in 2016, a state with nearly two million homes.
Home insurance policies will cover water damage, depending on the source. Common incidents like burst pipes and accidental bathtub overflows are covered, but water that touched the ground before entering your home is a flood, and you’ll need a special policy for flood coverage.
Most insurance agents can give you a quote or bind coverage. Rates vary depending upon risk. FEMA has assembled nationwide maps that determine the flood zone for an area based on elevation and proximity to water. Insured value also plays a large role in premiums, with homes insured for higher amounts having higher premiums. Flood insurance rates range from a few hundred dollars per year up into the thousands.
Flood insurance covers the building and your personal property, but only property that is stored above ground. Finished basements and items stored in basements (or outdoors) aren’t covered. Coverage is also limited to $250,000. However, this coverage limit is well above the average flood claim of $39,000.
Be aware that flood insurance has a 30-day wait on effective dates to prevent “last minute” insurance buyers from driving rates higher for everyone.
Most Affordable Cities
Home insurance rates in South Carolina are higher than the national average, but some areas are more affordable than others. Coastal areas trend much higher than inland areas, with Interstate 95 serving as an informal dividing line between higher and lower average rates.
Nature’s geographic risks affect rates, but average rates are also driven by factors such as crime rates, distance from a fire station, the types of homes in the area, construction costs, and average insured value. With all those factors considered, rates are still heavily weighted by unique individual factors, such as credit scores, claims history, insurance history, and even driving records.
Some of the most affordable cities in South Carolina for home insurance include:
Most Expensive Cities
Among some of the more expensive cities in South Carolina for home insurance are:
Next Steps to Get South Carolina Homeowners Insurance
We all like to save money, but insurance is one of those areas where you have to wonder if there is an expense to be paid later. The unique risks in South Carolina make understanding your coverage especially important to the buying decision.
Try to put aside some time to speak with an agent in person when you’re shopping for insurance. The conversation regarding your insurance needs and how your coverage actually works will be enlightening, possibly uncovering additional discounts or coverage adjustments to help offset any new coverages you add.
Living in South Carolina’s sunshine, you already have it made. Now, all you have to do is properly protect the home you’ve made for you and your family. The reason there are so many insurers is because one size doesn’t fit all. There’s a home insurance policy that’s right for each household — and with the right mix of coverage and discounts — there’s a policy at the right price.
Frequently Asked Questions
1) Q: What are the most common types of home insurance claims?
Wind and hail claims top the list with nearly 40% of all home insurance claims due to these two acts of nature. Fire and lightning are the second most common, but claims due to fire tend to much bigger than claims dues to other types of risk. The possibility of a total loss is why it’s so important to insure your home for the full cost of rebuilding. Get a custom quote today.
2) Q: If I drop my computer, will home insurance cover the cost of replacement?
Home insurance policies usually cover personal property for a specific list of risks, called named perils. These perils might include fire, theft, burst pipes, and more, but dropping your laptop or TV or spilling soda on your new game console isn’t covered. See the best home insurance providers for a custom quote.
3) Q: How does home insurance liability coverage work?
Most home insurance policies provide liability coverage that can help protect you and your family against several types of lawsuits or liability claims. Coverage limit options usually begin at $100,000 and can go as high as $1 million. Your liability coverage provides coverage for common mishaps, like slip and fall accidents or animal bites and can protect you even when you are away from home. However, home insurance liability coverage does not provide coverage for automobile-related liability or liability related to business activity. Get the best home coverage and policy through our top providers today.