Coverage leaves the coast
Insurers are edging away from homeowners' policies on Long Island for fear of hurricanes
as posted at www.newsdays.com
By RICHARD J. DALTON JR
Newsday Staff Writer
February 2, 2007
Susan DeCastro tends to remain loyal to a home-insurance company. But as insurers scale back on Long Island and other coastal New York areas over concerns a hurricane could strike, DeCastro has been shopping around.
"I don't like the thought of them dropping me," said DeCastro of West Islip, a policyholder of Liberty Mutual and its predecessor since 1989. "I'd rather leave on my own terms."
At least a half-dozen companies, including Allstate, Travelers, Liberty Mutual and Nationwide, are refusing to renew a small percentage of policies in downstate New York, including Long Island, New York City and Westchester.
No insurer has completely withdrawn from the market recently, but some won't issue new policies, especially for homes close to the coast.
"The state Insurance Department is concerned and is looking at the situation," said Eric Dinallo, acting superintendent for the New York State Insurance Department.
Some insurers say they're overexposed on Long Island and must cut back to avoid huge payouts if a hurricane strikes. The insurers say hurricanes in 2004 and 2005, including Hurricane Katrina, caused concern.
"They're trying to diversify," said Sal Castiglione, chief of consumer services and licensing bureau at the state Insurance Department. "I think you're seeing more and more companies doing that."
Allstate, for instance, has 26 percent of the Long Island home-insurance market, spokeswoman Krista Conte said. The company is looking at customers' history of claims and the type of frame construction to decide which customers it won't renew, Conte said. Allstate considers a customer's credit history only when considering whether to issue a new policy.
The company also is taking into account whether a customer has other policies with Allstate, Conte said.
Allstate was the first to announce a scale-back a year ago, and several have followed. Liberty Mutual has 8 percent of the Long Island market, far higher than its 5.4 percent share statewide, spokesman Glenn Greenberg said. So the insurer won't renew 2 percent of policies here over three years, he said.
State law limits the number of nonrenewals to 4 percent of a company's policies per year.
But an agent for Nationwide, who asked not to be identified discussing internal policy, said the company is pushing agents to switch policyholders to another company, even offering bonuses to the agents who get "high-risk" customers to leave.
He also said the company is shedding homeowners' policies for customers who don't have auto insurance with Nationwide.
If a customer leaves voluntarily, it doesn't count toward the state's 4 percent cap on nonrenewals.
Nationwide spokesman Joe Case said the company won't write new homeowner policies as of March 1 on Long Island, New York City and parts of Westchester, with a few exceptions.
The company isn't issuing nonrenewal notices but is seeking to have 14,000 downstate customers voluntarily leave, with 130,000 remaining, Case said.
"We're trying to find creative ways to reduce the property exposure on our books without leaving our customers hanging," Case said.
Some consumers also have said they've had big increases in premiums.
Lindenhurst resident Alan Schneider, who lives a half-block from a canal and five blocks from the Great South Bay, said Allstate told him the insurer wouldn't renew his policy because he's too close to the water and didn't have an auto policy with the company.
He turned to State Farm, but he's paying $795 a year, 36 percent more than his Allstate premium, even with a deductible he doubled to $1,000. "It's frustrating," he said.
Liberty Mutual refused to renew the policy for Manhasset resident Elizabeth Coogan, a customer for 20 years.
The nonrenewal notice in November indicated Coogan's house was too close to the water, she said.
"I said, 'Hello? Do you know where my house is? I wish I had a waterfront house,'" Coogan recalled.
The letter also cited another reason for the nonrenewal: Coogan didn't have car insurance with Liberty Mutual.
"The fact is I left them for car insurance because their rates are so high," she said.
What insurers are planning
Several insurers are scaling back in downstate New York. Among them:
Liberty Mutual
Won't write new policies for homes within a mile of the coast. Nonrenewals are possible for two groups:
Those who have had multiple claims
Those who have a wood frame home and don't have an auto policy with Liberty Mutual
Travelers
Won't renew for one-half of 1 percent of the state's policyholders. Writing some new policies.
MetLife
"We continue to write new homeowners business in New York coastal areas, including Long Island," spokesman Joe Madden said. "We are not canceling or nonrenewing business solely based on proximity to the coast."
Allstate
Focusing nonrenewals on Long Island, New York City and Westchester. Not renewing policies to nearly 4 percent of its customers statewide.
What you should know about home insurance
Home insurance companies must give at least 45 days' notice before refusing to renew a policy.
Insurers must maintain a policy for three years after the policy is initially issued or voluntarily renewed.
If you receive a nonrenewal notice, shop around immediately, said Eileen Anderson, senior vice president of the Community Development Corp. of Long Island. "You may have to go to more than one agent, broker and company," said Sal Castiglione, chief of consumer services and licensing for the New York State Insurance Department. "Maybe three years ago, all you needed to do was make a phone call."
For those who can't get home insurance with traditional private insurers, the New York Property Insurance Underwriting Association provides property insurance - but not liability - on an a la carte basis for various hazards such as fire, lightning and windstorm. (It is also known as the FAIR - Fair Access to Insurance Requirements - plan.) Rates are typically 20 percent higher than those quoted by traditional commercial insurers. The association also has a coastal market assistance plan. Visit nypiua.com or call 212- 208-9700 or 800-522-3372.
With traditional commercial insurers, having auto insurance with the company that provides homeowner's insurance may help avoid nonrenewals, but it's no guarantee.
Try to maintain good credit, as some insurers consider credit scores.
Make claims only for major events.
Check a history of your insurance claims for errors. Visit choicetrust.com or call 866-718-7684 for more information.
