Property Owners Cast Adrift
Legislature's Failure To Act Imperils Home Ownership
By Brian Magoolaghan
Rockaway's waterfront property owners, jettisoned by their insurance companies after the 1990s storms that made noreasters infamous, now face more tough times, but flooding and inclement weather are not to blame.
The New York Property Insurance Underwriting Association (NYPIUA), established by the state in the late 1960s, has provided coverage to more than 50,000 people who are not able to get policies from other companies. Included in that number are many from Rockaway, especially in Bayswater, and Broad Channel, who are often rejected because of their proximity to Jamaica Bay.
On April 30, however, the legislation authorizing NYPIUA to renew old policies, and write new ones expired. Since then, the association has not been accepting applications and has been sending out non-renewal notices.
The reason behind the cancellations is, surprisingly, car insurance. The legislation that could either extend NYPIUA until 2006 or make it a more permanent part of state law has been tied to another bill that affects personal auto insurance.
Under the New York State Senate's extender bill, some drivers could see their premiums increase by as much as 30 percent, said New York State Assemblymember Pete Grannis, head of the assembly committee on insurance. Grannis has blasted the senate for their failure to pass legislation to keep NYPIUA from shutting down.
"I don't think anyone wants to see it (NYPIUA) completely expire," said Dunkin Davie, a representative from State Senator James L. Seward's office. Seward, a republican from the 51 district, is the sponsor of the bill which combines the auto and property insurance legislation.
"It's our opinion that we are not the controversial part of the legislation," a NYPIUA representative told The Wave.
Meanwhile, depending on the action of the assembly and senate over the next few days, the problem could either be quickly resolved, or become, at least, a summer-long issue. If they fail to extend the safety-net program before going on recess, less than a week from now, some locals will likely be left to scramble and beg for coverage. Many won't find any, and others won't be able to afford it if they do, said insurance broker Margaret Wagner of Century 21, Channel Realty. According to Wagner, insurance companies don't want to hear from property owners in this area.
"They're not even interested," said Wagner.
Edward J. O'Hare, Jr., of Broad Channel, is one owner hoping for a quick resolution. O'Hare received his non-renewal notice from NYPIUA early this month, and was given a little more than 30 days to find a new carrier. O'Hare told The Wave that he and many of his neighbors must go to the state for part of their homeowners insurance, because regular companies are "bailing out" of areas that are close to water.
O'Hare has some time to search for coverage elsewhere while hoping the legislators get it together, but other NYPIUA policies expire much sooner. According to Dr. Ellen D. Kiehl, a representative from the Professional Insurance Agents (PIA) of New York, New Jersey, Connecticut, and New Hampshire, many will see their insurance cancelled on June 29. PIA said it supports the legislation that would make NYIUPA "a permanent legal entity, to avoid periodic disruptions cased by recurrent shutdowns."
New York State Senator Malcolm Smith, representing Rockaway and other parts of Queens, agrees. "It needs to be permanent," he said, adding, "It's getting caught up in the budget battle and Albany politics."
This insurance uncertainty has implications for the real estate market also. Transactions will be delayed or kept from closing if buyers can't show their bank proof of coverage, Keihl said. For as long as NYPIUA is in this "sunset" period, anyone looking to buy a home has one less option, and will have to figure the price of high-cost coverage in to their overall budget.
According to the PIA, NYPIUA has seen sunsets in 1997 and again the following year, but never for more than a month.
Each time, the association was rescued by the legislature. Many Rockaway homeowners hope that the same will happen once again.
At press time, it was unclear as to what the outcome would be prior to the end of the session.