The Storm Before the Storm
Insurers are declaring Brooklyn a high-risk hurricane zoneand
canceling policies.
* By S.Jhoanna Robledo
Damian Young got the news last fall by mail: Allstate was dropping
him, and he'd have to find another insurance company to get coverage
for his brownstone. "[The letter] alluded to Hurricane Katrina and
said they're unable to carry the risk of living in coastal areas,"
says the actor. "I live in Park Slope. I was like, What? This doesn't
make sense!" Nearly a year later, his neighbors are getting Dear John
letters, too, from Allstate and other firms, some pointing to the
chances of "similarly destructive storms" in the area. In fact, it's
happening all over Brooklyn, and "I see two or three nonrenewals each
week," from Bayside to the Hamptons, says Ruchman and Associates
insurance broker Jonathan Banach. In some cases, homeowners are being
re-upped, but at triple the fees.
New York is certainly not immune to hurricanes. Ours is a coastal
island city, and even if you're a half-mile inland and can't see the
water, that's a small distinction to a swirling storm a thousand miles
wide. (The house pictured, in Ditmas Park, is about three miles from
the bay, and its owners were just cut loose by Allstate.) According to
the Climate Institute, a nonprofit environmental group, the city is
"quite vulnerable" to hurricanes and nor'easters, thanks in part to
"the area's nearly 1,500 miles of coastline, and that four out of five
boroughs are islands." But some owners contend that rejections aren't
based on real risk. (One Gowanus Lounge blogger writes, "I live on
Metropolitan and Manhattan in Williamsburg at the top of the hill and
we were canceled too. We're not even in the flood zone!") "There's no
differentiation [in terms of] distance to water," Banach says of the
cases he's seeing. In brief, the law allows insurers to drop 4 percent
of their policyholders when they see elevated risk, and they're doing
just that. Allstate, for its part, issued a statement about what it
calls our "catastrophe-prone area," saying it is forced "to explore
options to manage our exposure in order to better protect our customers."
For now, some other firms are taking on rejectsYoung found an
underwriter through his insurance broker, and the state also offers
some coveragebut usually at higher rates. There's no question,
though, that the recent spate of cancellations is causing agita. "Used
to be if you've had no losses, you got renewed," says Banach. "They
don't care now."
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