Wednesday, May 10, 2006

Long Island Homeowners Insurance, the Saga Continues

There’s a lot going on these days in the New York and Long Island homeowners insurance market. One of the insurance agents associations says they are aware of another major insurance company making plans to take some drastic actions on Long Island. On the other hand, efforts are being made to bring more companies into the area to help people get their cancelled insurance policies replaced. It almost has to be new companies who have not been here before in any major way, because that’s the only way to spread it out more.

Taking an active role in that effort and more has been New York State Insurance Commissioner Howard Mills. I’m not into politics, but this guy really seems to have a great depth of knowledge about what has to happen, and is working very hard on it. There is action in the State Legislature to address the problem of too many homeowners insurance policies being cancelled in one area. Meanwhile he is reaching out to other states to see if some carriers not currently writing New York homeowners insurance can be persuaded to join the fray.

I heard yesterday that he is planning some news conferences to encourage people, among other things, to buy flood insurance for their homes. Federal Flood Insurance covers different damage from homeowners insurance, but still is important to stabilizing the overall situation.

One of the problems happening in Mississippi and Louisiana right now is that people are suing the major homeowners insurance carriers to try to make them cover flood damage. Homeowners insurance clearly excludes flooding as defined by the standard flood insurance policy, specifically to make it clear that the two policies cover different things. But you can’t necessarily rely on a reasonable court finding when they perceive that the insurance companies have plenty of money and the poor people don’t have homes.

So homeowners insurance carriers on Long Island will feel more comfortable if more folks have flood insurance, even if they are not right on the water. The weather and disaster experts have said that if Katrina hit Long Island, water would reach Sunrise Highway. That covers an awful lot of homes that are not ‘on the water’.

More to come. In the meantime if you want more info on Long Island flood insurance you can visit the FEMA site for the National Flood Insurance Program at www.floodsmart.gov or our site at www.FloodInsuranceNY.com.