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Im hearing the S Shore is being zonked on Homeowners ala Katrina.
You heard right. It's been going on since the beginning of this year but right now for NEW policies only (not renewals).
Trouble is, it's not just the South Shore. It's ANYWHERE along the LI coast.
An in-law of mine is in the insurance business. I called him in April because a friend of ours wanted to buy a house in Great River but got turned down by 2 companies for homeowners insurance. This is from the email he sent me with the breakdown of the CURRENT underwriting rules for homeowners insurance from all the standard LI companies for NEW POLICIES: (not renewals...yet)
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ALLSTATE: Will not write new homeowners policies anywhere on LI anymore
TRAVELERS: Will not insure any house within 1 mile of LI coastline. In addition, they are not going to renew any existing policies that currently cover houses within that 1-mile range.
STATE FARM: Will not insure a house that is within 2500 ft of our coastline. But if the house is valued at more than 500K there will be "surcharges" because they don't really want to cover the higher-end stuff. Hurricane deductibles of either 3% or 5% (depending on how far the house is from the water) will apply.
LIBERTY MUTUAL: Will not insure a house within 1 mile of ANY BODY OF WATER (shoreline, Nissequogue or Connetquot River, Lake Ronkonkoma, etc). In addition, ALL new policies anywhere on Long Island will be subject to a 5% hurricane deductible.
AMICA: Will not insure a house within 2 miles of our coastline. In addition, they will not insure a house that has a buried fuel oil tank.
MERCHANTS MUTUAL: Will not insure a house within 1 mile of our coastline. Mandatory hurricane deductible of either 3% or 5% depending on actual house location.
UTICA: Will not insure a house within 1 mile of the North Shore or within 3 miles of the South Shore. Mandatory hurricane deductible of either 3% or 5% depending on actual house location. Will not insure any house that has a buried fuel oil tank.
CHUBB: Will not write ANY new homeowners policies east of Riverhead AT ALL. No exceptions. All other homes near water are on a case-by-case evaluation based on the home's exact location. They don't have a formal distance-from-water cutoff point but the premium for coverage will be strongly determined by that factor. Mandatory hurricane deductible of either 3% or 5% depending on actual house location. A few areas, such as areas close to the LIE and thus in the middle of the island, may not be subject to a hurricane deductible but most others will be.
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These rules aren't "projected", they're in place right now as we speak. Or were as of the beginning of April 2007, some companies may have tightened them up even more since then.
My friend would only have been able to get homeowners coverage if he went to a "high risk" insurer such as AIG, and the premium would have been another 50% higher than if the house wasn't within 2 miles of the water. So he passed on the house and now he won't look at any house closer to the shore than that. I don't blame him, neither would I!
Also remember, NO homeowners policy covers flood damage as residents of New Orleans found out the hard way. And flood insurance only covers up to $250,000. Almost every single house on LI is worth more than that but people here have their heads in the sand about insurance coverage and think they'll be walking away with a check for the "value" of their hurricane destroyed home. Not gonna happen in most cases.
Maybe the people that loose their homes on the south shore will take the insurance check & relocate. If we have less square footage, it doesn't make sense that everyone would stay.
This got me thinking. If you have insurance and the houses/land is ruined (not able to be built upon due to erosion, etc), how would your insurance compensate you? Would you be compensated just to rebuild the dwelling, or for the land value too? You know if your market value here is 900,000....the dwelling cost to rebuild is probably only about 250,000 - 300,000 but the other 600,000 is based on land and location.
I have always thought of this. Even in another form of disaster sense (related to chemical, nuclear, biological war, destruction). In Long Island much of our home value is in the land, but if that is useless, are we just screwed out of that $ or would our insurance be expected to compensate for that too?
Last edited by Glad2BHere; 07-30-2007 at 01:44 PM..
TRAVELERS: Will not insure any house within 1 mile of LI coastline. In addition, they are not going to renew any existing policies that currently cover houses within that 1-mile range.
This is not true. I just spoke with them the other day about a quote for waterfront property in LI, and they told me that they do not deny coverage to any house on LI at all, due to FEMA rules.
I literally got a quote for a house directly on the water that was in a Flood zone X and they quoted only $350 due to way the house was built and the flood zone location.
But I was assured they could not deny coverage, the policy just might be pricier.
ETA - FLOOD quote was $350. Not home.
Last edited by Glad2BHere; 07-30-2007 at 01:42 PM..
This got me thinking. If you have insurance and the houses/land is ruined (not able to be built upon due to erosion, etc), how would your insurance compensate you? Would you be compensated just to rebuild the dwelling, or for the land value too? You know if your market value here is 900,000....the dwelling cost to rebuild is probably only about 250,000 - 300,000 but the other 600,000 is based on land and location.
I have always thought of this. Even in another form of disaster sense (related to war, destruction). In Long Island much of our home value is in the land, but if that is useless, are we just screwed out of that $ or would our insurance be expected to compensate for that too?
Insurance doesn't cover land, I know that for a fact because I had the same conversation with my in-law after Katrina.
Homeowners policies cover repair or replacement of dwelling and contents (and liability but that's not what you were asking) only. Land isn't covered at all, by anything. If it disappears, the owner is screwed, just like you say.
That's why it's important to update the "replacement value" of a homeowners policy, not just rely on the automatic percentage increase that gets tacked on every year. I had my company recalculate the replacement cost in January because of the post-Katrina price hikes, and the new replacement value was OVER 200K MORE than what the policy had it as (and I've only owned this house since 2002)! And it wasn't underinsured to begin with either, it was insured for what I bought it for and then after I did some major updates it was recalculated and raised about 50K.
Last edited by Keeper; 03-19-2008 at 02:16 PM..
Reason: name changed
This is not true. I just spoke with them the other day about a quote for waterfront property in LI, and they told me that they do not deny coverage to any house on LI at all, due to FEMA rules.
I literally got a quote for a house directly on the water that was in a Flood zone X and they quoted only $350 due to way the house was built and the flood zone location.
$350/year for standard HOMEOWNERS insurance??? With all due respect, no way, unless the house is a small cottage and even then that's cheaper than anything I've heard of in years.
$350 for just FLOOD INSURANCE through Travellers, yes. I have flood insurance (am in Flood zone X also) and I pay $315/yr for the max coverage which is 250K.
FEMA has no control over HOMEOWNERS policies, AFAIK, just over the NFIAP policies which FEMA issues through the various companies that write in an area.
Last edited by Keeper; 03-19-2008 at 02:15 PM..
Reason: name change
$350/year for standard HOMEOWNERS insurance??? With all due respect, no way, unless the house is a small cottage and even then that's cheaper than anything I've heard of in years.
$350 for just FLOOD INSURANCE through Travellers, yes. I have flood insurance (am in Flood zone X also) and I pay $315/yr for the max coverage which is 250K.
FEMA has no control over HOMEOWNERS policies, AFAIK, just over the NFIAP policies which FEMA issues through the various companies that write in an area.
The $350 was for Flood in Flood zone x, not home.
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