2009-03-13 / Top Stories

Peninsula Home Insurance Carousel

By Nicholas Briano

Barry Brandes is one of many peninsula residents who are seemingly scratching and clawing their way for fairly priced homeowners insurance only to get the traditional rate increase or never surprising cancellation of their comprehensive insurance policies.

"I feel like my policy is always in danger of being dropped," he said. Brandes can't help but feel this way since he and his wife are already on their way to their third homeowners insurance company since 1992. Although they rarely have claims, or hurricanes or floods, he says he was most recently dropped by Liberty Mutual, but adds that he had previously been dropped by the Allstate Insurance Company, as well.

It is a growing epidemic along the shorelines of the peninsula as homeowners like the Brandes family struggle to keep up with the shrinking coverage options in what many insurance companies call high risk areas.

But how high risk is the peninsula? There has not been a major storm with flooding and excessive damages since the nor'easter of 1992. This leaves Brandes wondering why they and their neighbors are left scrambling for coverage options every few years when there are hardly any claims on the policies.

Brandes says that Liberty Mutual dropped his comprehensive homeowners policy on his west end home this past week.

"We are in the process of making some difficult decisions regarding our overall hurricane exposure along the east coast, including New York," the cancellation letter said.

Liberty Mutual spokesperson Glenn Greenburg says, however, that few people in New York are impacted by the recent policy cuts.

"There are very few customers impacted. Out of the 285,000 homeowner policies in New York, less than one quarter of one percent of the policies were dropped," he said.

That would amount to roughly 712 people, according to Greenburg, who was unable to state how many of those are Rockaway residents.

Brandes, however, feels it is probably a significant amount across several companies.

"Several of my neighbors have been dropped also, as well as my sister, who has Allstate," he said.

Allstate and State Farm did not return phone calls on the details of any plans in place to reduce their interests in high risk areas.

Greenburg says, though, that Liberty Mutual's cancellations have affected very few Rockaway customers and that these actions are necessary to ensure the financial safety of the company and policies.

"We do this to preserve the financial responsibility to our customers," he said. "We must manage out coastal risk so not to overexpose ourselves to catastrophic events."

Although there may be pockets of flood exposed areas, New York State is far less a flood risk than gulf coast states that have legitimate hurricane issues with which to contend.

According to figures provided by Federal Emergency Management Agency (FEMA), since 1978 New York State has collected about $594 million in catastrophic losses; more specifically New York City, $72 million. However, states such as Louisiana, $15 billion or Florida with $3 billion, far outweigh the amount of damages in the northern states.

So it is hard to convince locals that they are high enough of a risk in comparison to those states to warrant the cancellation of their policies by these large companies.

Brandes says, like many other homeowners, he had a comprehensive policy which covered categories that included flood, windstorm, fire, theft and liability. Since having his coverage dropped he is now forced to buy a separate flood insurance policy and is paying double the amount overall, with less coverage than his dropped Liberty Mutual policy.

"It is more money to get flood insurance separate," he said. "I have less coverage than I did before, even though I went years on the old policy without a single claim. I feel like there are not many more places to go."

For Brandes it is now off to Chubb Insurance, until he gets his next policy cancellation letter - the same one you may get next week.

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