The rising costs of Pawleys Island flood insurance have become a significant concern for many homeowners.

Pawleys Island holds an unwanted distinction on the South Carolina coast. The small barrier island town carries the highest average flood insurance premium in the state — **$4,199 per year** under the National Flood Insurance Program, according to 2025 FEMA data reported by The Sun News [The Sun News, April 2026]. That figure is nearly double Georgetown’s $2,078, more than triple Surfside Beach’s $1,216, and roughly ten times higher than the $386 average in Myrtle Beach.

The number tells a story that extends well beyond one town. Across South Carolina, nearly 5,000 residents dropped flood insurance in a single year. Homeowners on fixed incomes face premiums that double in two or three years. And FEMA’s Risk Rating 2.0 overhaul — designed to price flood risk more accurately — has landed hardest on the people least able to absorb the cost. For Horry County residents and Georgetown residents, the question is whether the coast is becoming a place only the wealthy can afford to protect.

Understanding Pawleys Island Flood Insurance Costs

## A Barrier Island With Nowhere to Hide

Pawleys Island’s premiums are not a pricing error. They reflect geography. The entire town sits inside a Special Flood Hazard Area — every property falls within FEMA’s AE or VE flood zones [Town of Pawleys Island, official]. Any property on the island faces a 26 percent chance of flooding during a standard 30-year mortgage [Town of Pawleys Island].

For those living on Pawleys Island, understanding the implications of flood insurance is crucial for financial planning and home ownership.

The primary threat is wind-driven storm surge off the Atlantic. Hurricane Ian tested that vulnerability when it made landfall near Pawleys Island in September 2022, driving an estimated seven-foot peak storm surge into the island. But the damage pattern stretches back decades. The town carries 71 repetitive loss properties — homes that have flooded and claimed multiple times. On the north end, 25 properties qualify, and only five were properly elevated at the time of their second claim. On the south end, 46 qualify, with only seven properly elevated [Town of Pawleys Island].

Pawleys Island holds a CRS Class 5 rating under FEMA’s Community Rating System, earning policyholders a 25 percent discount on premiums. Even with that discount, the town’s average premium remains the highest in South Carolina. The geography sets the floor.

## Premiums Are Doubling — and Homeowners Are Making Hard Choices

The statewide averages mask the individual stories. Tracy Barber, a Pawleys Island homeowner, told The Sun News that her flood insurance premium has doubled since 2023 to $2,650 per year. Before she switched agencies, the premium nearly climbed to $3,350. “I’d hate to feel that I was forced out by insurance,” Barber said [Sun News, 2026].

She is not alone. Michael Peterson of Surfside Beach told The Sun News that his premium has nearly doubled over five years to approximately $1,000 per year — a mounting burden on a fixed retirement income [Sun News, 2026]. Mary Etta Williams of Garden City faces a $6,150 annual NFIP premium after four floods in eleven years. Williams owns her home outright, which means she has no mortgage lender requiring flood coverage. She could drop it entirely [Sun News, 2026].

That calculus — pay thousands each year or go uninsured and absorb the full loss when the next storm hits — is playing out across the Lowcountry and Grand Strand. The numbers show which way it is tipping. South Carolina’s total NFIP policy count fell from 198,232 in 2024 to 193,541 in 2025 [Sun News, 2026]. Hilton Head alone lost more than 2,000 policies. Horry County lost approximately 1,300. Georgetown County lost roughly 300.

Shari Mendrick, a floodplain administrator in Hilton Head, put the stakes plainly. “$2,000-$2,500 is a pretty big expense, and a lot of people have dropped their flood insurance,” she said. “It’s kind of scary” [Island Packet, 2026]. The people dropping coverage are not wealthy second-home owners making a calculated bet. Many are retirees and working families who simply cannot carry the cost.

## Risk Rating 2.0: More Accurate, More Painful

The premium increases trace back to a deliberate federal policy shift. FEMA’s Risk Rating 2.0, implemented between 2021 and 2023, replaced the old zone-based flat-rate system with individualized property-level pricing. Under the previous model, two homes in the same flood zone paid similar premiums regardless of actual exposure. Under Risk Rating 2.0, FEMA accounts for distance to water, flood type, building characteristics, and replacement cost [WPDE, 2021].

FEMA said 97 percent of policyholders would see changes of $20 or less per month [WPDE, 2021]. That may hold in aggregate, but barrier islands and repetitive loss properties absorbed disproportionate increases. More than 80 percent of policies in Murrells Inlet, Socastee, and Bucksport face annual increases near $120 [WPDE, 2021]. The statutory cap limits annual increases to 18 percent — or 25 percent for severe repetitive loss properties — but those caps compound. An 18 percent annual increase doubles a premium in roughly four years.

The new system also lowered the maximum allowable annual premium from $45,000 to $12,125 [WPDE, 2021]. That cap protects the most expensive properties but does nothing for the median homeowner watching a $600 premium climb toward $1,200. The NFIP carries $22.5 billion in debt to the U.S. Treasury [Sun News, 2026] — a structural deficit that removes any political incentive to lower rates.

**The result is a pricing system that is more honest about risk and less forgiving of where people chose to build.** For Pawleys Island, where every parcel is in a flood zone, the honesty is expensive.

## What Horry County Is Doing — and What It Cannot Do

Local officials have not been idle. Horry County’s CRS rating has improved steadily over the past decade, moving from Class 9 in 2010 (a 5 percent premium discount) to Class 7 in 2017 (15 percent) to Class 5 as of April 2024 (25 percent) [MyHorryNews, 2023]. Lauren Harrelson, Horry County’s Floodplain Manager, said the Class 5 rating saves policyholders $1.5 million per year [MyHorryNews, 2023].

Myrtle Beach and Pawleys Island also hold Class 5 ratings, while North Myrtle Beach sits at Class 6 with a 20 percent discount. Charleston earns a 40 percent discount. April O’Leary of Horry County Rising has proposed a “conservation flood zone” designation that could yield an additional 10 to 20 percent discount by restricting development in high-risk areas [WPDE, 2023].

But CRS discounts work as percentages of a base premium, and when the base premium climbs steeply under Risk Rating 2.0, a 25 percent discount still leaves homeowners paying substantially more than they did five years ago. Horry County cannot change its elevation, its proximity to the Atlantic, or the path of the Waccamaw River. Hurricane Florence in 2018 sent the Waccamaw cresting at 22.1 feet and caused $41.6 million in damage to 1,331 properties in unincorporated Horry County alone [WMBF, 2018]. Randy Webster, reflecting on Florence’s legacy, said, “It will always be the benchmark storm until the next one — and there will be a next one [WMBF, 2025].

On the legislative side, SC Bill 4817, the Insurance Rate Reduction Act, passed the House 96-17 on April 1, 2026 and now sits in a Senate committee. It provides Safe Home grants of $3,000 to $7,500, retrofit tax credits of $2,000, and Catastrophe Savings Accounts [SC Legislature]. The catch: the bill addresses wind and hail insurance — state-regulated lines. **Flood insurance runs through the federal NFIP, and Columbia has no lever to pull on those premiums.**

## The Bigger Picture: Who Gets to Live on the Coast?

The flood insurance crisis is quietly reshaping who can afford coastal property in Horry and Georgetown counties. Carolina Crafted Homes reported that flood insurance now runs $2,000 to $6,000 per year in newly reclassified flood zones, and homeowner premiums have increased 20 to 35 percent since 2023 across Horry and Georgetown counties [Carolina Crafted Homes, 2025]. Areas hit hardest by reclassification include Socastee, Cherry Grove, and Surfside Beach.

The financial pressure extends into the mortgage market. Freddie Mac announced in April 2025 that full flood risk premiums are now factored into mortgage debt-to-income calculations [Carnegie Endowment, 2025]. A $4,000 annual flood premium reduces a buyer’s qualifying loan amount by tens of thousands of dollars. Nationally, high-risk flood properties face an estimated $1.7 to $2.7 trillion in value corrections as insurance costs are fully priced in [Carnegie Endowment, 2025].

A coverage gap compounds the problem. First Street Foundation data shows approximately 150,000 properties across Horry, Georgetown, Charleston, and Beaufort counties face major-to-extreme flood risk over the next 30 years. Only about 100,000 sit in FEMA-designated zones that require insurance [Sun News, 2026]. That leaves roughly 50,000 properties exposed to significant flood risk with no mandate to carry coverage — and a shrinking likelihood that owners will carry it voluntarily.

FEMA’s updated flood maps, which took effect in December 2021, moved approximately 10,500 parcels — more than 12,300 addresses — into flood zones in Horry County. About 5,500 were removed through appeals, and base flood elevations were lowered by two feet [WPDE, 2021]. Those map changes continue to ripple through the real estate market as buyers discover flood costs that were not part of the original purchase calculation.

The Grand Strand has always lived with flood risk. What has changed is the price of acknowledging it. For Pawleys Island homeowners paying $4,199 a year to insure against a threat that is not hypothetical, the arithmetic is becoming personal — and for a growing number of residents, the answer is to go without coverage and hope the next storm misses.

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## Further Reading

– The Sun News — “Beachfront dream, billionaire budget: Flood insurance pricing SC buyers from paradise” (April 2026): https://insurancenewsnet.com/oarticle/beachfront-dream-billionaire-budget-flood-insurance-pricing-sc-buyers-from-paradise

– Island Packet — “More Hilton Head residents are dropping flood insurance” (April 2026): https://insurancenewsnet.com/oarticle/more-hilton-head-residents-are-dropping-flood-insurance-why-theyre-doing-it

– Town of Pawleys Island — Flood Information: https://www.townofpawleysisland.com/flood-information/

– MyHorryNews — “Savings coming for Horry County flood insurance holders” (October 2023): https://www.myhorrynews.com/news/savings-coming-for-horry-county-flood-insurance-holders/article_5b950e64-62b8-11ee-ac2c-03d809d6258b.html

– WPDE — “FEMA’s new flood insurance rating system” (October 2021): https://wpde.com/news/local/fema-flood-insurance-rating-system-south-carolina

– WPDE — “New FEMA flood maps in effect across Horry County” (December 2021): https://wpde.com/news/local/the-long-awaited-strongly-contested-fema-flood-maps-are-now-in-effect-across-horry-co

– WMBF — “Hurricane Florence left lasting impact on Horry County” (September 2025): https://www.wmbfnews.com/2025/09/24/hurricane-florence-left-lasting-impact-horry-county-seven-years-later/

– Carnegie Endowment — “Flood Insurance Reform for the U.S. Housing Market” (January 2025): https://carnegieendowment.org/research/2025/01/flood-insurance-reform-for-the-us-housing-market

– SC Bill 4817 — Insurance Rate Reduction Act: https://www.scstatehouse.gov/sess126_2025-2026/bills/4817.htm