By: Anthony Rifilato
"We've had this house in my family for over 30 years and we've never had anything - even with Hurricane Gloria - we've never lost any shingles or anything," Landecker said. "In all that time we never filed a claim along those lines."
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 homeowner's 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 "difficult decisions." 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.
Landecker is one of thousands of South Shore residents whose policies are not being renewed by large insurance companies such as Allstate, State Farm, Liberty Mutual and 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 York's largest insurer, made headlines when it informed 26,000 homeowners in the city's five boroughs and Westchester, Nassau and Suffolk counties that it would not renew their policies.
"The problem from Florida to Maine is that insurance companies are scared," 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. "They are looking at the profit versus the losses, and it's more profitable to get out of the market."
According to Miller, who is one of the largest flood-insuring agents in New York state, Long Beach residents have it the hardest. "Long Beach is the toughest place to obtain homeowner insurance because it's an all-year residence and barrier island in New York state," 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.
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.
"People who have never submitted a claim are not receiving renewal notices, which is outrageous," said Weisenberg, adding that since Hurricane Katrina, many insurance companies have opted not to write policies for homeowners in coastal areas nationwide. "For them to cut back homeowner's insurance on a hypothetical is unfair and unreasonable."
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.
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. "It's designed to help the homeowner," said Fuschillo. "That's why this new law is critical. It's important that somebody who is being arbitrarily canceled will be protected."
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. "Our impacted customers can work with their Allstate agent to help find replacement coverage," said Brian Pozzi, Allstate's regional counsel. "It's a healthy insurance market here in New York, and coverage is readily available."
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.
"It's not easy for us," Pozzi said. "We've 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."
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.
Meanwhile, Landecker said that between his exorbitant taxes and lack of coverage, he is looking to leave Long Island when his kids finish school. "There's no future here on Long Island," Landecker said. "It's too expensive."
