By Anthony Rifilato
³We¹ve had this house in my family for over 30 years and we¹ve never had anything ‹ even with Hurricane Gloria ‹ we¹ve never lost any shingles or anything,² Landecker said. ³In all that time we never filed a claim along those lines.²
So it came as a shock to the Landeckers when their insurance company, Encompass, informed them late last month that they were not renewing their homeowner¹s insurance policy in October, because, the company said, their home is in close proximity to the water. In a letter, Landecker said, he was told that because the 2004-05 hurricane season was so devastating ‹ and with more storms expected this season ‹ Encompass was making ³difficult decisions.² Now Landecker is in the precarious position of searching for a different homeowner insurance carrier, and he may have to pay much more for his policy, he said.
³It¹s shocking: I pay all this money in taxes and now I can¹t even get insurance?² said Landecker, who said he has paid $1,700 a year for his homeowner¹s insurance. ³I would like to keep the same level of protection without going much higher than what I¹m paying now.²
Landecker is one of thousands of South Shore residents whose policies are not being renewed by large insurance companies such as Allstate and many others. Companies have shifted away from writing such policies as fears of a Hurricane Katrina-like event happening in New York continue to grow. Earlier this year, Allstate, New York¹s largest insurer, made headlines when it informed 26,000 homeowners in the city¹s five boroughs and Westchester, Nassau and Suffolk counties that it would not renew their policies.
³The problem from Florida to Maine is that insurance companies are scared,² said Denis Miller of the Denis Miller Insurance Agency Inc. in Long Beach, who explained that most companies no longer write policies for homes that are within 2,500 feet of the water. ³They are looking at the profit versus the losses, and it¹s more profitable to get out of the market. They are afraid of that Category 2, 3, 4 and 5 hurricane coming to Long Island.²
According to Miller, who is one of the largest flood-insuring agents in New York state, Long Beach residents have it the hardest. ³Long Beach is the toughest place to obtain homeowner insurance because it¹s an all-year residence and barrier island in New York state,² Miller said. And while communities such as Baldwin are easier to write policies for than Long Beach, Miller said that the trend is affecting most towns along the South Shore.
³I¹m hearing from hundreds and hundreds of people who are being canceled from Allstate and State Farm,² Miller said. He added that homeowners have some options, by going to either the New York State Insurance Department or by calling specialty insurance brokers such as his company.
When Landecker learned that his policy was not being renewed, he contacted Assemblyman Harvey Weisenberg (D-Long Beach) and state Sen. Dean Skelos (R-Rockville Centre) for help. Weisenberg said that he has been hearing from a number of his constituents and has begun writing letters on their behalf to Howard Mills, superintendent of the New York State Insurance Department.
³People who have never submitted a claim are not receiving renewal notices, which is outrageous,² said Weisenberg, adding that since Hurricane Katrina, many insurance companies have opted not to write policies for homeowners in coastal areas nationwide. ³My feeling is that [insurance companies] have to cover all aspects of insurance. They can¹t cherry-pick. For them to cut back homeowner¹s insurance on a hypothetical is unfair and unreasonable.²
The issue has prompted many state lawmakers to sponsor legislation aimed at protecting homeowners and providing them with needed assistance, while calling on insurance companies to reverse course or, at the very least, provide homeowners with policy alternatives.
State Sen. Charles Fuschillo (R-Merrick) recently sponsored a bill that would require insurance companies to inform homeowners about other insurance options. Specifically, the bill would require any insurance company that is canceling, not renewing, or issuing a conditional policy to notify homeowners about possible coverage through the Coastal Market Assistance Program (C-MAP). Gov. George Pataki recently approved the bill, and Fuschillo said that homeowners must be made aware of C-MAP if their policies are canceled.
³[Insurance companies] just want to cut their losses, and it¹s wrong,² Fuschillo said. ³[Homeowners] are shocked that they¹re being canceled. These are two state programs, and if these companies are going to cancel, we want people to know that these two alternatives exist.²
C-MAP, run by the New York Property Insurance Underwriting Association, is a network of participating insurance companies that give special underwriting consideration to helping homeowners obtain insurance. ³It¹s designed to help the homeowner,² said Fuschillo. ³That¹s why this new law is critical. It¹s important that somebody who is being arbitrarily canceled will be protected.²
State Farm said that while they did stop writing new homeowner policies in 1993 after Hurricane Andrew, the agency continues to write new policies on Long Island, except for barrier islands such as Long Beach. But, said Steve Candon, a State Farm agent in Franklin Square and a Long Beach resident, the company does renew its existing clients and continues to write some new policies for co-ops and condos on the barrier island.
³We kept the existing business, but stopped doing new business,² said Candon. ³The only time we dropped somebody is if they had five claims or so.²
Candon said that State Farm is very active in C-MAP and assists residents trying to obtain a homeowner policy through the program.
Allstate lauded the legislation, but said its insurance agents already assist customers who are not receiving renewals and that the situation is not as dire as it sounds. ³Our impacted customers can work with their Allstate agent to help find replacement coverage,² said Brian Pozzi, Allstate¹s regional counsel. ³It¹s a healthy insurance market here in New York, and coverage is readily available.²
On its Web site, Allstate says that hurricanes will become more frequent and severe in the years ahead, making the potential for widespread losses worse. Pozzi said that fixing the catastrophe problem is larger than Allstate and the insurance industry as a whole. The current system, he said, is not equipped to handle another Hurricane Katrina or another mega-catastrophe.
³It¹s not easy for us,² Pozzi said. ³We¹ve fought hard for our customers for over 75 years. We just have too much exposure to catastrophe. I think Katrina kind of taught us a lesson. Certainly it has given people pause to stop and think about this type of thing. I think it¹s important for people to understand that while it¹s difficult for us, we value our customers.²
Still, the move by insurance companies has homeowners like Landecker scrambling for new coverage that could cost them more, Weisenberg said. Miller added that state programs such as C-MAP lack the teeth to make a real impact, as more and more insurers are turning away from writing such policies.
³[Homeowners] now have to work hard to find someone to write their coverage, and certainly homeowner¹s insurance prices are going up,² said Miller, explaining that the average premium is around $1,200. ³C-MAP hasn¹t been necessary until now, and can only help to a small degree because there aren¹t enough companies willing to write near the water. There is no easy solution here. It¹s all dependent on the weather. Maybe if a hurricane doesn¹t hit, they¹ll come back.²
Meanwhile, Landecker said that between his exorbitant taxes and lack of coverage, he is looking to leave Long Island when his kids finish school. ³There¹s no future here on Long Island,² Landecker said. ³It¹s too expensive.²
