The bizarre world of high-risk hurricane insurance

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Damage in McCellanville from Hurricane Hugo in 1989, the storm caused an estimated $10 billion of damage in 1989 dollars.

As you're likely to know, properties along the coast are often seen as too probable for wind damage by hurricanes for private insurance companies to pick up, so the S.C. Wind and Hail Association often steps in with coverage at higher rates.

What is less well known is just how something like the Wind and Hail Association manages to insure $17 billion in properties, though collecting less than $100 million in premiums a year.

In a report, The Post and Courier aims to offer insight, in part:

That presents the group with a major problem: If a catastrophic hurricane made a direct hit on Charleston or Myrtle Beach, the group would never have enough to cover losses, Harrison said. For this reason, the wind pool must go outside South Carolina to find ways to pay for a future catastrophe.

And it does this by taking out insurance policies of its own. 

It's an illuminating read into the complexities of insurance — beyond the no so trivial task of risk estimation; take a read here.