Buying or selling on Folly Beach is as much about insurance and taxes as it is about porches and views. If you miss a detail, your cash flow and risk can change fast. You want clear, predictable numbers so your deal still makes sense after closing. In this guide, you’ll learn how flood and wind coverage, deductibles, property taxes, and short term rental rules shape your bottom line, plus a simple checklist to underwrite with confidence. Let’s dive in.
Why insurance drives Folly Beach numbers
Most of Folly Beach sits in a FEMA flood hazard area, so flood risk and insurance are front and center for nearly every financed deal. The City’s flood information confirms that flood exposure is a defining factor for the island’s housing. Review local resources early so you understand the risk profile and required coverage for your specific address. See the City’s overview in the Folly Beach flood information page for context and links to FEMA maps and programs. City of Folly Beach flood information
If your lender is federally regulated and the property is in a Special Flood Hazard Area, they must require flood insurance. Even outside mapped zones, some lenders still require it based on their guidelines. Get your lender’s requirement in writing as early as possible so you can quote the correct coverage and timing. FEMA flood insurance requirement overview
Flood insurance essentials
FEMA’s Risk Rating 2.0 prices flood insurance by property characteristics, not just the flood zone. Two neighboring homes can see very different quotes based on elevation, distance to water, construction, replacement cost, and prior claims. Expect variation and budget based on actual quotes, not averages. Risk Rating 2.0 overview
To get reliable numbers fast:
- Ask for the current flood policy and any Elevation Certificate. An EC can help refine quotes and may reduce a premium if it documents favorable height. How rating factors work
- Quote both NFIP and private flood. Lenders often accept private policies if they are at least as broad as NFIP terms.
- Check timing. NFIP policies often carry a waiting period, and lender closings require proof of coverage. Build this into your contract dates.
Wind and hurricane coverage
Coastal wind risk can affect availability and price of homeowners insurance. If admitted carriers decline the wind peril, the South Carolina Wind and Hail Underwriting Association, often called the Wind Pool, may be available as a market of last resort. Wind Pool policies cover only wind and hail, so you still need a separate homeowners policy for other perils. About the SC Wind Pool
Review the policy’s hurricane or named-storm deductible. In South Carolina, these are often percentage based, commonly 1 to 5 percent of the dwelling limit, and must be clearly disclosed. Model the dollar amount so you know your out-of-pocket exposure after a major event. SC deductibles disclosure rule
Modeling property taxes on Folly Beach
South Carolina taxes turn on assessment ratios and local millage. A primary residence is assessed at 4% of fair market value. A second home or investment property is assessed at 6%. That classification alone creates a large swing in your annual bill. Use the Charleston County tax estimator and request a written estimate with the correct assessment status for your use. Charleston County tax estimator
Folly Beach is its own tax district, and effective bills can be higher than many inland parts of the county. If you plan to change use, such as converting to a second home or STR, recheck your numbers at 6%. If you will occupy as your primary residence, confirm eligibility for the 4% legal residence assessment with the County.
Short term rental taxes and licenses
If you plan to rent short term, expect layered taxes. In Folly Beach, state sales and accommodations taxes stack with county and city accommodations taxes. Platforms may collect some taxes for you, but owners are responsible for full compliance, business licensing, and local rental registration. Verify what your platform remits and what you must file. Folly Beach STR guidance
Build these items into your underwriting:
- City and County accommodations taxes, plus state sales and accommodations taxes.
- Business license and STR registration requirements before you list.
- Audit risk and potential penalties for missed filings.
Your Folly Beach underwriting checklist
Use this quick list to confirm insurability and true carrying costs before you commit.
Documents to request
- Current homeowners declarations and endorsements, including whether wind is included and the exact storm deductible.
- Flood insurance: current policy if any, plus NFIP and private quotes for your structure. Request elevation data and any prior map change records. Rating factors to gather
- Loss history for the last 5 to 10 years for wind, hail, flood, and water events.
- County tax card and a written tax estimate under both 4% and 6% classifications. County estimator
- STR records if applicable: business license, rental registration, and tax remittance history. City STR rules
Numbers to model
- Annual homeowners premium and any separate wind or Wind Pool policy.
- Flood premium under NFIP and private options, with and without mitigation like elevating mechanicals.
- Named-storm deductible impact at 1 to 5 percent of Coverage A.
- Taxes and fees under 4% vs 6% assessment, plus stormwater or other listed fees.
Mitigation that can lower costs
Target upgrades with real underwriting impact. Wind improvements such as roof tie downs, impact-rated openings, and secondary water barriers may earn credits with some carriers. The South Carolina Department of Insurance offers consumer resources and information on mitigation credits and programs. SC coastal insurance resources
For flood, actions like elevating mechanicals, adding compliant flood openings, or increasing first-floor height can improve NFIP pricing. Always consult a qualified insurance agent and the local floodplain manager before investing so you capture credits correctly. Risk Rating 2.0 factors and mitigation
Put it all together
A strong Folly Beach deal starts with early quotes, verified tax status, and a clear plan for storm deductibles and STR compliance. When you size these items upfront, you protect cash flow and avoid surprises at renewal.
If you want an experienced local advocate to help you pressure test the numbers and structure a smooth closing, connect with Lori Petersen. You’ll get boutique guidance backed by deep coastal market experience.
FAQs
Do Folly Beach homebuyers need flood insurance for financed homes?
- If your property is in a FEMA Special Flood Hazard Area and your lender is federally regulated, the lender will require flood insurance. Many lenders also require it outside mapped zones.
How does FEMA’s Risk Rating 2.0 change my flood quote?
- It prices to your property’s specifics, like elevation and distance to water, so quotes vary widely between homes. Always obtain an address-specific quote.
What is the South Carolina Wind Pool and when is it used?
- It is a market of last resort that covers only wind and hail when standard carriers decline the wind peril. You still need a separate homeowners policy for other risks.
How do 4% vs 6% assessments affect Charleston County taxes?
- Primary residences often qualify for the 4% assessment, while second homes and investments are at 6%. That classification drives a large difference in annual taxes.
What short term rental taxes apply in Folly Beach?
- STRs typically owe state sales and accommodations taxes plus county and city accommodations taxes. You also need a business license and rental registration, and you must verify which taxes your platform remits.
