What Rising Insurance Costs Are Doing to Deals in South Carolina Right Now

We covered the Insurance Rate Reduction and Policyholder Protection Act in a recent issue. The bill is important, and it's moving in the right direction. But while Columbia works on the long game, the insurance crisis is affecting deals right now, and knowing how to navigate it is the difference between a closed transaction and a collapsed one.

Here's what's actually happening on the ground.

The numbers first.

Nationally, property insurance costs have surged 70% over the past five and a half years — far outpacing increases in principal, interest, and property taxes combined. Insurance now consumes almost one in every ten dollars spent on average mortgage-related costs.

South Carolina is not immune. Our average homeowners insurance premium sits at $2,708 annually for a standard policy (above the national average) and projections suggest rates will climb another 11% by the end of the year. And if your clients are close to the water in Myrtle Beach or Hilton Head? The average premiums run $5,340 annually, driven by direct Atlantic Ocean exposure and tropical storm activity.

Where deals are dying.

The most painful scenario playing out right now: a buyer is under contract, the appraisal comes back fine, and then the insurance quote arrives at two or three times what the buyer (and buyer's agent) expected. Suddenly the buyer's debt-to-income ratio doesn't work, or the buyer simply can't stomach the total monthly payment. The deal dies — and everyone has wasted weeks of work.

This isn't hypothetical. It's happening in transactions across the coast. And it's happening late — after inspections, after appraisals, after everyone has invested time and money — because insurance is still being treated as a closing-week checkbox rather than an early-transaction priority.

What smart agents are doing differently.

The fix is to move insurance earlier in the timeline. Encourage your buyers to get insurance quotes before they make an offer, or at minimum during the first few days of the inspection period. Waiting until a week before closing is a recipe for trouble.

This isn't overreach — it's service. A buyer who discovers their dream home costs $600 a month to insure during the inspection period can renegotiate, adjust their offer, or make an informed decision to walk away. A buyer who discovers it three days before closing has no good options — and neither do you.

Beyond timing, nearly 30% of buyers nationally have already changed their search locations due to insurance costs, and another quarter have altered their buying strategies altogether. That means your buyer consultation needs to include an honest conversation about the true cost of ownership — not just mortgage payment and property taxes, but insurance, and in coastal areas, both flood insurance and wind/hail coverage. A home that looks affordable on the MLS can look very different when the full monthly picture comes into focus.

Listing agents: This affects you, too!

Sellers need to hear this too. Most South Carolina homeowners renewals have jumped double digits through 2024 and 2025 — and if your renewal went up 15 or 25 percent and you didn't file a claim, you are very much not alone. Buyers are going to ask about insurance costs. They're going to look it up. If a seller's current premium seems surprisingly low, a buyer's lender may flag it during underwriting when the actual quote comes in higher.

Transparency upfront prevents ugly surprises later. Know what your sellers are paying. Know whether the property is in a flood zone. Know if there's a wind or hurricane deductible. Get a quote or two yourself so you can answer questions confidently when they come up (and they will). These aren't details to discover at the closing table.

The bottom line.

Insurance used to be a line item agents handed off to a lender or closing attorney. That era is over. In today's market, insurance is a deal variable that needs to be in your hands early, communicated clearly, and managed proactively.

The agents who understand this aren't just better at their jobs. They're closing more deals.