Tuesday, April 25, 2006

It's the Homeowners vs. the Hurricanes

Last week we had our regular meeting of the Independent Insurance Agents and Brokers of Suffolk County, the local part of the national organization of Independent Agents. Our guest speaker was Howard Mills, New York State Superintendent of Insurance.

We were immediately impressed with his depth of knowledge and up-front speaking style. This is no political hack we were listening to, so we paid close attention. Naturally a good part of his talk was about the New York homeowners insurance issues, especially focusing on Long Island and Suffolk County. In a relatively short time he took us all the way from the global market for reinsurance, which is the way insurance companies themselves protect against catastrophic losses, right down to what we as individual homeowners should be looking at to help lower our risk of damage in a storm.

He stressed that no one approach will solve this problem, it will have to be a combination of changes in the insurance industry and changes to things like building codes and construction methods. The one thing I thought was interesting for our discussion here was a survey that his department did of home improvement stores in the area.

Mr. Mills told us that storm shutters, reinforced garage doors, and hurricane resistant roof clips are standard all through Florida, and required in all new construction there. Not only are they not required here on Long Island by building codes, but his office could not even find a store, large or small, that carried them in stock. They are only available by special order.

Hurricane roof clips, in particular, are apparently pretty inexpensive, easy to install, and provide great protection against high winds. It may be some time before local building departments require them on all homes, but it may be a relatively short time before insurance carriers start to offer insurance savings, or more liberal underwriting, based on people who go the extra mile to lower their risk of a hurricane claim.