The week after October's devastating flood, state offices were closed. "Not so much here at the Department of Insurance," says Director Ray Farmer. He says employees came in and helped hundreds of flood victims file their insurance claims. A few months later, the department received over 40,000 claims related to the flood - helping people across the state begin their recovery. Cooper McKim speaks with DOI Director Ray Farmer about the importance of insurance after October's storm and how to prepare for the upcoming hurricane season.
Farmer says the flood should be a reminder of how important a proper insurance policy is. Only 10% of South Carolinians had flood insurance when the storm came, so thousands were left with minimal aid after the waters receded. "We've learned from the flood that although a lot of us didn't live in a flood zone, we were flooded anyway," says Farmer. He adds that natural disasters like the flood are a risk that require protection: "when we have exposure to these perils, we can protect our assets, protect our home by purchasing insurance."
While many people have home insurance as a requirement from a mortgage lender, flood insurance comes as a separate policy either from private insurers or the National Flood Insurance Program. Farmer understands this, saying "we generally buy things that are required. If your mortgage lender requires you to buy flood insurance, you had it. If they didn't, that's not something we'd normally consider doing until after the flood. That is something that is at the front of mind for all citizens in this area and hopefully they're considering now for the future."
Eight months later, over 600 companies have made payouts adding up to about $417 million. Farmer says that process is coming to a close: "some people were covered, and the insurance companies came out and did what they do best in the time of an emergency. They stepped up, paid those claims, and paid them quickly. 95% of the claims that were filed have been paid to date." The insurance companies involved in the payouts were not negatively effected by the storm and are all still solvent and competitive, says Farmer.
As the state enters into the hurricane season, Farmer says it's a perfect time to re-assess one's insurance policy -- especially considering the flood. He explains, "we've already had two tropical storms... those were good reminders that this is the perfect time to sit down and look at our homes to make sure they're hurricane ready, wind resistant as best they can be, but more important that we have the insurance coverage that is appropriate for us."
Farmer has several recommendations for hurricane preparedness listed in the clip below.
His other recommendations include a home inventory, which would help a family in the claim adjusting process. Farmer says, "the hardest thing for a homeowner to do is to replay in their mind what is in every room of the house." He adds it takes one thorough walk-through of what's around the house, and recording what's there. It saves someone the stress later after a fire or flood ruins everything.
Farmer summarizes his recommendations in a simple three-word mantra when it comes to the hurricane season, "plan, protect, and prepare."
The hurricane season began the first of June and ends November 30th.
Additional Links
Massive Flooding In South Carolina; Many Consumers Lack Flood Insurance - PR Newswire
With Flood Insurance Rare, Homeowners Have Little Recourse - New York Times
South Carolina Insurance Head Talks Lessons Learned After Historic Flood - Insurance Journal
SC Department of Insurance Website
Hurricane Guide - South Carolina Emergency Management Division