What's raising home insurance rates by thousands of dollars?

Homeowner's insurance rates going up

HORRY COUNTY, SC (WMBF) - If you haven't looked at your home insurance premium lately, you might be in for major sticker-shock.

Some insurance companies are hitting homeowners with thousands of dollars in increases in unincorporated parts of Horry County. It has to do with how far away homeowners are from the nearest firehouse. Since that distance hasn't changed, why has the cost of insurance? WMBF News' Michael Maely set out for answers.

Weeks after their destruction, the Windsor Green flames remain a vivid reminder of the need for home insurance, but miles away, in Carolina Lakes, that insurance is skyrocketing like nothing residents have ever seen.

"I was shocked," said concerned homeowner Patrick Allese. "I thought they made a massive mistake."

Allese has had his home in Carolina Lakes for seven years, seeing little change on his bill, until this year, when his bank wanted almost $7,000 more toward insurance, bringing his total escrow to more than $9,000.

"I got on the phone to BB&T and said, 'Listen, there's something wrong here. You guys made a big mistake,'" Allese said. "Well, 'no,' that's what we got from the insurance company."

Allese's neighbor, Beth Anctil, had a similar experience.

"At first I thought it was a typo," she said. "I looked at it, and I started to panic.

Anctil has had her Carolina Lakes home for nearly 20 years, with no major premium changes. She called her insurance company when she saw her new premium jumped from $1,300 to $4,300. Her agent thought it was a typo too, and then she dug deeper.

"She said, 'Oh we have a problem, here,'" Anctil recalled. "She goes, 'You're now ISO-10,' and she said, 'Yeah this is gonna be a big problem.'"

Anctil recalled that her insurance agent said she was in an ISO-5 area, and now she's in an ISO-10 area, the worst rating.

"The plain fact is, they were ISO-10s before, and they've been lucky for a while," said Horry County Fire Chief Fred Crosby.

Chief Crosby said if homes are more than five miles from the nearest firehouse, the county has had them listed as an ISO-10 since at least 2005.

"ISO" stands for Insurance Services Office; it's the insurance-funded group behind the rating system.

A WMBF News crew tested the actual distance with a drive from Station 23 to Carolina Lakes, which was almost five miles, and sure enough, the crew hit the five-mile mark before they got to the homes in question. Some showed up at 5.3 miles.

Yards may be peppered with fire hydrants, but it's the distance that equates to dollars.

In the case of homeowner Anctil, the distance of three football fields adds up to thousands of dollars more in premiums.

But why are rates going up now? Apparently, newer, more accurate mapping technology is the cause.

"They started to suggest that due to today's GPS technology they know the exact distance," Anctil said. "Some insurance agents tell clients they're now able to calculate distance to the home, not just the zip code."

"Almost half of the neighborhood's being affected; the homeowners were shocked," Anctil added. "A lot of them are retirees and some are widows, and they're being strongly impacted by this."

It's not just Carolina Lakes homeowners that have to worry.

Chief Crosby says as many as 6,000 people in unincorporated Horry County have had the 10 rating.

The county average ISO rating is a 5, but the areas with a 10 rating are illustrated in the pink color on the map above (See a full-size PDF version of the map here: http://bit.ly/13GSNWf). In addition to Carolina Lakes, there are pockets near Legends, in the Longs area, as well as mostly rural areas around the perimeter of the county.

"It would have been nice if the county had said, 'Hey just an update, you might be seeing this in your bills in the future,'" Antcil said.

Could the county have given a warning that this was coming?

"I don't know any way that we could have," Chief Crosby said, "Because first of all, we, almost 100 percent sure we didn't know what they were being billed. We don't know who their insurance company is."

In order to be able to tell the right residents their rates were going up, the department would have needed information they just couldn't access.

"I can understand them wishing we'd have been able to, but I can't think of any way we could have," Chief Crosby said.

As for a solution, Chief Crosby says he hopes to be able to relocate the University Station, but with a cost of up to $5 million, he says it's going to take time and likely tax increases - a tax these homeowners are willing to pay.

"It's chump change compared to getting an $8,000 bill," Allese said.

Just like the fire chief, ISO representatives said they were not aware of any new rating change in Horry County.

One insurance agency we heard back from said ISO ratings would impact premiums, but they couldn't say how much, and they did not respond to our question about whether a new mapping system impacted these new rate increases.

Some of the homeowners were able to find much cheaper rates with other insurance companies.

For help with your insurance-related questions, South Carolina Department of Insurance employees said they are available for people who are seeking options.

You can contact them here: http://doi.sc.gov

A statement from Vice President of Community Mitigation for ISO, and a statement from State Farm Insurance Company are attached along the left side to view fully.

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