I received an e-mail last Thursday that I wanted to share with you, as well as my response.
You probably do not remember us (with your load of clients) but you helped us with buying our house in *** about 3 years ago.
I am writing because we were shocked this week as we got a notice that our homeowners insurance policy with NY Central Mutual will not renewed due to excessive hurricane loss potential. A quick check with other companies All State, Geico quickly confirmed that this is a fact. No big company will issue a policy. We are at a loss. The insurance agents tell us that somebody will probably take us on but it looks like it will be a small company we have never heard of.
We wondered if this is a common thing happening here.. Could you advise us on the risks of small company: can they just go bankrupt and as a consequence we lose everything if anything really happens and a big storm hits NY? Are they federally insured?
We are working people who put all we have towards paying the mortgage for this house and in a way the house is our safety net for the future.
It feels very scary.
Thanks and best regards.
I immediately wrote back that of course I remembered this lovely and intelligent couple. Then I wrote:
The problem you raise is a real one. Insurers are making calculated risks that our area is overdue for a hurricane, so they are cutting their potential losses now by dropping customers. I agree it is scary!
I would first contact your State Assembly & Senate representatives' offices: most have someone on staff familiar with the subject, who can advise you on what the State Insurance Board is doing to assist. If that doesn't help, by all means, get back in touch with me.
Please let me know how this is resolved.
The insurers are looking at predictions like these from the US “Landfalling Hurricane Probability Project”:
- 21% probability that NY City/Long Island will be hit with a tropical storm or hurricane in 2007. Normal value is 16%.
- 15% probability that NY City/Long Island will be hit with a hurricane in 2007. Normal value is 9%.
- 6% probability that NY City/Long Island will be hit with a major hurricane (category 3 or more) in 2007. Normal value is 4%.
I am buying a few extra batteries and flashlights on my next shopping trip, and hoping that the clients who wrote me as well as many others will be recognized as needing assistance from the state BEFORE any disaster blows our way.
For another discussion about hurricanes, see: 9/29/2006 http://real-lawyer.livejournal.com/18925.html