South Carolina flood insurance

Why South Carolina homeowners need flood insurance

According to the Federal Emergency Management Agency (FEMA), every county in South Carolina has experienced flooding in the past. Although coastal homes are at high risk, inland waterways can also flood and cause damage—even a clogged drainage ditch near your home could cause extensive damage following a storm. Since flooding is not covered by most standard homeowners insurance policies, many SC residents purchase flood insurance to give them more robust financial protection.

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, there are a range of factors that insurers, including the NFIP, will consider. Your rate will depend partly on the carrier that writes your policy. In the past, FEMA wrote most flood insurance policies, but now there are a number of private insurers offering flood coverage. Because of this, rates have become more competitive and you may find the best flood insurance for your needs by asking for quotes from several companies to see who offers you the lowest rate.

Other factors that your insurer will consider include the following:

• Location: Historic records of flooding in your region may indicate a likelihood of future floods. Areas that have seen more significant rates of flooding are likely to see higher premiums.
• Home age and construction costs: Newer homes that have been built to withstand flood waters are less vulnerable to damage than older homes in many cases. 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.
• Coverage limits and deductible: Typically, you will pay more for higher levels of coverage than lower. A higher deductible may also lead to a lower cost, since it means you will pay more out of pocket before your policy kicks in after a covered claim.
• Type of policy: You may pay a lower rate if you qualify for the NFIP's Preferred Risk Policy, which offers reduced pricing if you are in a low-risk flood area.

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 in South Carolina, 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.

It's worth noting that insurers may issue a moratorium on writing new policies or modifying existing policies in the days before a natural event such as a hurricane is forecast. This is so that carriers are able to pay out on all potential losses without suddenly taking new policies as the storm approaches. In some cases, state law may also issue a moratorium to keep insurers from canceling policies before a predicted disaster, to protect policyholders.

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 Southern Farm Bureau Casualty 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