Key Takeaways
- SCWHUA provides wind and hail coverage for properties in coastal areas that cannot obtain coverage in the standard market
- Coverage is available in designated beach and coastal areas of South Carolina
- SCWHUA is a residual market shared among all property insurers licensed in South Carolina
- The association provides wind and hail coverage only, not comprehensive property coverage
- Applicants must demonstrate inability to obtain wind coverage in the voluntary market
South Carolina Wind and Hail Underwriting Association (SCWHUA)
Overview of SCWHUA
The South Carolina Wind and Hail Underwriting Association (SCWHUA) is the state's residual market mechanism for wind and hail coverage in coastal areas.
Purpose and Function
| Aspect | Description |
|---|---|
| Type | Residual/involuntary market |
| Structure | Shared pool among all licensed property insurers |
| Purpose | Provide wind and hail coverage for coastal properties |
| Oversight | South Carolina Department of Insurance |
Eligibility and Coverage Area
Designated Territory
SCWHUA coverage is available in:
| Area Type | Description |
|---|---|
| Beach Areas | Barrier islands and beachfront properties |
| Coastal Counties | Charleston, Beaufort, Georgetown, Horry, Jasper, Colleton |
| Inland Areas | May extend inland in designated zones |
Eligibility Requirements
To qualify for SCWHUA coverage, applicants must:
- Property Location: Property must be in designated territory
- Market Efforts: Unable to obtain wind coverage in standard market
- Property Condition: Meet minimum insurability requirements
- Other Coverage: Have basic property coverage elsewhere (if required)
Properties Covered
- Owner-occupied residential dwellings
- Rental properties
- Condominium units and associations
- Commercial buildings
- Mobile homes (with restrictions)
Coverage Provided
Wind and Hail Coverage Only
| Coverage | Included | Notes |
|---|---|---|
| Wind Damage | Yes | Direct physical loss from wind |
| Hail Damage | Yes | Direct physical loss from hail |
| Wind-Driven Rain | Limited | Only through openings created by wind |
| Flood | No | Must be obtained separately |
| Fire | No | Must be obtained separately |
Coverage Limitations
SCWHUA coverage is supplemental to other property coverage:
- Provides wind and hail coverage only
- Does not include fire, theft, or liability
- Deductibles may be percentage-based
- Coverage limits based on property value
Deductibles and Rates
Deductible Structure
| Deductible Type | Amount |
|---|---|
| Standard | 2% of coverage amount |
| Optional | 1% or 5% available |
| Named Storm | May differ from standard |
Rate Factors
SCWHUA rates consider:
- Distance from coast
- Construction type
- Building age
- Protective devices
- Loss history
- Elevation
Application Process
Steps to Obtain SCWHUA Coverage
- Seek Standard Coverage: Attempt to obtain wind coverage in voluntary market
- Documentation: Document inability to obtain coverage
- Application: Apply through licensed South Carolina agent
- Underwriting Review: SCWHUA reviews property information
- Inspection: Property inspection may be required
- Policy Issuance: Coverage begins upon premium payment
Agent Requirements
- Must be licensed in South Carolina
- Must have SCWHUA appointment
- Responsible for proper application submission
- Cannot bind coverage without SCWHUA approval
Loss Sharing
How Losses Are Allocated
All property insurers licensed in South Carolina share SCWHUA losses:
| Component | Description |
|---|---|
| Assessment Base | Proportional to voluntary market share |
| Loss Distribution | Spread among all participating insurers |
| Deficit Recovery | May assess insurers for excess losses |
| Reinsurance | SCWHUA purchases reinsurance to limit assessments |
Exam Tip: SCWHUA provides ONLY wind and hail coverage for coastal properties - it is not comprehensive property insurance. Property owners must have separate coverage for fire, theft, liability, and other perils through standard policies or the FAIR Plan.
What type of coverage does the South Carolina Wind and Hail Underwriting Association (SCWHUA) provide?
In which areas of South Carolina is SCWHUA coverage available?
Who shares in the losses of SCWHUA?