Trends in South Carolina Homeowners Insurance Rates

Monday, December 29th, 2025

Why Insurers Are Struggling to Maintain Policies in a Difficult Market

Insurance companies operating in South Carolina are facing one of the toughest property-insurance environments in the country. While homeowners often see rising premiums as simple price increases, the reality is far more complex. Insurers are working to maintain stability, remain solvent, and continue offering coverage in a landscape shaped by severe weather losses, construction inflation, reinsurance pressures and underwriting challenges.

This article examines why insurers in South Carolina are raising rates, what market-wide pressures they are responding to, and how these trends affect their ability to keep writing and renewing policies in the state.

Current Rate Landscape: What Rising Premiums Say About Insurer Pressures

Average homeowners insurance premiums in South Carolina continue to outpace those in many other states. That doesn't just reflect rising costs for consumers—it points directly to the financial pressures insurers are under.

According to MoneyGeek, the average annual premium for a homeowners policy in South Carolina in 2024 was about $2,708, compared to the national average of roughly $2,423.

City-level pricing also underscores the strain carriers face in higher-risk markets:

Charleston averages around $2,570, according to Clovered.
Homeowners with poor credit see averages over $4,230 annually.
From 2010 to 2021, South Carolina premiums rose 86.6%, reflecting escalating losses and operating costs.

These figures represent insurers' attempts to keep premiums aligned with loss exposure, rebuild costs, and reinsurance rates—not simply a desire to charge more.

What's Driving the Rate Increases? Insurers' Challenges Explained

South Carolina's insurance carriers face multiple overlapping pressures that make the market difficult to sustain.

A. Catastrophe Risk and Severe Weather Losses

South Carolina's exposure to hurricanes, tropical storms, flooding, hail and wind events places enormous strain on insurers. Reports from the Department of Insurance show that "secondary perils" have continued to generate major losses year after year.

Between 1997 and 2013, claim severity in the state increased 6.5% annually, well above inflation—eroding insurer margins.

Nationally, some insurers have paid out $1.10 for every $1.00 collected, an unsustainable loss ratio. To remain financially stable, carriers must price policies to match escalating catastrophic losses.

B. Skyrocketing Construction and Rebuilding Costs

Insurers also face rising claim severity due to:

Lumber and roofing cost spikes
Labor shortages
Supply-chain delays
Tariffs on building materials

Tariffs alone are projected to add more than $100 to annual homeowners premiums in some markets. When rebuilding a single home after a claim becomes significantly more expensive, insurers must adjust premiums to avoid underwriting losses.

C. Underwriting Factors (Credit, Home Type, Fire Protection, etc.)

Carriers in South Carolina closely evaluate:

Credit-based insurance scores
Age and type of home construction
Fire protection rating
Claims history
Proximity to coastal areas

These factors allow insurers to remain selective and manage risk—but they also mean policies in higher-risk segments cost more.

For example, MoneyGeek reports homeowners with poor credit may average $4,230 per year, reflecting the increased risk insurers must price into policies.

D. Insurer Withdrawal and Market Contraction

Like in other coastal states, some insurers have reduced writings or tightened underwriting in South Carolina. When carriers leave or shrink their footprint, competition decreases—leaving remaining companies to shoulder a greater share of catastrophic exposure.

Fewer carriers in the market mean:

Less ability to spread risk
Higher reinsurance costs per insurer
Higher premiums to maintain solvency

E. Reinsurance Costs and Coastal Market Dynamics

Insurers writing in coastal South Carolina face steep reinsurance costs. The 2024 Coastal Property Insurance Market Report highlights:

Significant reinsurance rate increases
Higher wind and hail exposure
Pressure on the South Carolina Wind and Hail Underwriting Association

Reinsurance is one of the largest expenses insurers have, and rising global catastrophic losses continue raising those costs.

What These Trends Mean for Insurers in the Near Future

Projections for 2025 and beyond suggest that carriers will continue facing above-average risk exposure and cost pressures:

Insurify predicts 8% nationwide rate increases in 2025.
Local South Carolina reporting suggests increases around 11% by year-end.
South Carolina premiums already exceed the national average by 24%, and the gap is expected to widen.

For insurers, this means continued balancing between:

Keeping premiums high enough to remain solvent
Keeping premiums low enough for consumers to maintain coverage

This tension is central to today's insurance environment.

How Location & Home Features Drive Carrier Risk in SC

Insurers must account for wide variations in exposure across South Carolina:

Coastal areas like Charleston or Myrtle Beach have far higher wind/hail risk.
New construction lowers risk, while older homes often come with outdated wiring, roofing or materials.
Fire protection ratings heavily influence loss projections.

This leads to substantial pricing differences, helping insurers ensure policies align with actual exposure rather than averaging risk across the state.

Steps Insurers Encourage to Help Stabilize the Market

While rates may be rising, insurers continue promoting strategies that help reduce claims and keep policies sustainable.

Stronger Building Codes & Mitigation
Impact-resistant roofing, hurricane shutters, improved wiring and other mitigation steps reduce catastrophic losses—protecting both insurers and policyholders.
Appropriate Deductibles & Coverage Levels
Wind/hail deductibles help insurers manage catastrophic exposure while keeping policies available in coastal counties.
Maintaining Favorable Loss History
Low claim frequency helps insurers keep premiums stable and remain willing to renew policies.
Bundling & Discounts
Insurers continue offering credits for security systems, upgraded roofs, or policy bundling to keep policies affordable.
Market Transparency & Policy Reviews
Annual policy reviews help insurers ensure coverage is appropriate and reflect current rebuild costs.
Why Market Stability Matters for Insurers—and the State
Sustaining a viable property insurance market is essential not only for consumers but also for insurers and regulators. Key concerns include:
- Maintaining insurer solvency
- Ensuring insurers can continue writing in coastal and high-risk regions
- Preventing excessive market withdrawal
- Supporting fair rate filings that reflect genuine costs
- Managing catastrophic exposure to avoid systemic losses
Insurers want to remain in South Carolina—but only if pricing and underwriting conditions allow them to operate responsibly and sustainably.
What Could Shape the Insurance Market in the Coming Years
Several major factors will influence insurers' ability to maintain policies in South Carolina:
- Climate Change & Severe Weather
  More intense hurricanes and secondary perils create exponential increases in risk.
- Reinsurance Market Volatility
  Global disasters impact reinsurance rates, which then impact South Carolina premiums.
- Construction Cost Inflation
  If materials and labor continue rising, claim severity will rise with them.
- Legislative & Regulatory Shifts
  Changes in coastal wind pools, rate-filing rules, or mitigation incentives may reshape insurer participation.

Conclusion

South Carolina's rising homeowners insurance rates are not simply the result of carriers increasing prices—they reflect deep systemic pressures in the insurance marketplace. Insurers must navigate severe weather risk, skyrocketing construction costs, reinsurance volatility, and tightening underwriting conditions just to maintain a presence in the state.

As these challenges persist, insurers will continue adjusting rates and underwriting standards to stay solvent and offer coverage. Understanding these pressures helps explain why premiums are rising—and why keeping insurers in the market requires a balanced and sustainable approach to both risk management and regulation.

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