Insurance Companies Increasingly Abandoning Long Islanders After Sandy

Schumer Says Insurance Companies Increasingly Abandoning Long Islanders After Sandy

By Long Island News & PRs       Published: June 24 2013   

U.S. Senator Charles E. Schumer today stood with homeowners and the Long Island Housing Partnership (LIHP) to criticize insurance companies for dropping Long Island homeowners’ coverage after Superstorm Sandy, even on homes not damaged by the storm. Recently, Schumer’s office has been receiving dozens of complaints from constituents saying that their homeowners’ insurance policies have been cancelled  by carriers; many of these constituents have had these policies for years with no claims, and many had no storm damage.

Long Islanders already have limited homeowners’ insurance options: Allstate, State Farm  and Liberty Mutual issue the vast majority of policies on Long Island, and all three have been  withdrawing  from the Long Island market. Homeowners are now being forced to purchase policies from the “excess lines” market which is often two- to three-times as costly as policies in the “standard market,” and generally offer less favorable terms. Schumer today urged these three insurance companies to reverse their decisions to cancel these homeowners’ policies, and urged the Federal Emergency Management Agency (FEMA) to penalize them if they don't by limiting or prohibiting their participation in the National Flood Insurance Program, which is operated by FEMA.

All three companies participate in the lucrative National Flood Insurance Program, where they sell insurance policies for a fee and pass on the risk to the government.  Schumer said that unless they change course and continue to insure Long Islanders, FEMA should reduce their fees, limit their participation or prevent them from participating altogether. Schumer will note that by denying homeowners coverage, the insurance companies are driving up the cost of insurance for homeowners, which will lead many to drop coverage altogether, increasing the risk to the federal government when responding to the next disaster.

 “It’s bad enough that homeowner insurance policies are limited on Long Island, but now – with precious little  justification – policies are being dropped left and right, even for those who paid all their bill on time and had little-to-no storm damage” said Schumer. “Many of these homeowners were not even affected by Superstorm Sandy and now they’re being forced into extremely expensive plans. These insurance companies should not leave Long Island families and the federal government holding the bag and so today I am urging them to put a stop to these policy cancellations.”

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