Insurance companies drop homes on LI

September 18, 2009 3:50:51 PM PDT
Financial chaos for tens of thousands of folks on Long Island. They've had their homeowners policies dropped or not renewed, because insurance companies worry about catastrophic losses from hurricanes.

This, even though the last big hurricane, The Long Island Express was in 1938.

But the mere threat of a major storm led Joanna Bernardini's insurance carrier to drop her homeowners policy. Three miles from the ocean, she's been deemed too much of a risk.

"You have insurance in case you have casualties happen in your life, and obviously they weren't gonna back us up if anything happened, so they figured they'd drop a lot of people in case anything did happen," she said.

Since hurricane Katrina ravaged the gulf coast four years ago, state regulators say tens of thousands of Long Island homeowners have basically been fired by their insurance carriers.

More than 16,000 policies cancelled in 2006, 31,000 in '07, 34,000 in '08. And by June of this year, almost 20,000.

"That is very frustrating, and we absolutely sympathize with homeowners," said Steve Nachman.

State insurance deputy Superintendent Steve Nachman says the issue is not flood damage, rather, it's the risk wind might topple trees and devastate homes.

And while you can still find insurance, Nachman says it could cost several hundred dollars more, at a time when many homeowners are trying to save every dime.

"It's not for us to say that a 3,000 - 4,000increase is something that people can absorb. Particularly in this economy, that could be a really painful hit," he adds.

James Gray has been around long enough to remember the last major hurricane, more than seven decades ago. Now, his carrier has dropped him too.

But will another big one hit? He's not convinced.

"I just wonder about the scientific basis for all this," said Gray.

  • LINK Homeowners Insurance Resource Center.
  • LINK Consumer Guide to Homeowners and Renters Insurance.
  • LINK If you have problems getting homeowners insurance.
  • LINK How to file a complaint.

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