Home Insurers Cancelling in Eastern Coastal Areas

If you live in an area where you home could be damaged by a hurricane, even if it is miles from the coast, you may find your home insurance cancelled:

GARDEN CITY, N.Y., Oct. 15 — It is 1,200 miles from the coastline where Hurricane Katrina touched land two years ago to the neat colonial-style home here where James Gray, a retired public relations consultant, and his wife, Ann, live. But this summer, Katrina reached them, too, in the form of a cancellation letter from their home-insurance company.

The letter said that “hurricane events over the past two years” had forced the company to limit its exposure to further losses; and that because the Grays’ home was near the Atlantic Ocean — it is 12 miles from the coast and has been touched by rampaging waters only once, when the upstairs bathtub overflowed — their 30-year-old policy was “nonrenewed,” or canceled. ...

In the last three years, more than three million homeowners have received letters like the Grays’ as insurance companies, determined to avoid another $40 billion Katrina bill, have essentially begun to redraw the outline of the eastern United States somewhere west of the Appalachian Trail.

Public officials in Southern states from Florida to Texas have been fighting insurance carriers for years over rising rates and withdrawal of services, but officials in the Northeast have only recently joined the fray.

Companies including Allstate, State Farm and Liberty Mutual have “nonrenewed” policies not only in hurricane-battered places like Florida and Louisiana, but in New York and other Northern states that have not seen hurricanes in years. Since last year, those three companies and others have turned down all new homeowners’ insurance business in New Jersey, Connecticut, Rhode Island, Maryland, Massachusetts and the eight downstate counties of New York.

An independent insurance agents’ group puts the Grays among about 50,000 residents of the New York metropolitan area — and about one million homeowners in the Mid-Atlantic and New England states — whose policies have been canceled since 2004. While most homeowners have been able to find coverage with other major insurers, or with smaller companies, in most cases it is at higher rates and larger deductibles.

Back in 1992 I remember hearing that had Hurricane Andrew crossed the coast 20 miles to the north it would have put State Farm, one of the nation's largest carriers, out of business. The battering that may companies took following the four-hurricane Florida year and then the storms of 2005 have made them all jumpy about writing policies in areas subject either to storm surge or sustained high winds. In Katrina the surge wiped out homes and businesses as much as five miles from the shore, and the company I used to work for had Katrina-related wind claims as far as 150 miles inland.


Home insurers are not stupid, and though there hasn't been a hurricane in New England for many years, that doesn't mean it isn't going to happen and they don't want to be on the hook for it when it does.