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Nov 6, 2012 4:10 PMPublication: The East Hampton Press

Home Insurance: Who Picks Up The Tab For Sandy?

Nov 6, 2012 4:59 PM

For others, perhaps a higher-risk waterfront property owner who has had too many losses to secure coverage with those insurers, an “excess and surplus lines” company, like Lloyd’s of London or Lexington, may be willing to provide insurance where standard companies, whose policies and premiums are more stringently regulated, will not. Once again, though, erosion would not be covered. “No insurance company is all-encompassing,” Mr. Brenneman said. “There are certain things that even people who are protected are not covered for, and that is this whole erosion situation,” he said.

Rates for high-risk home insurance, Mr. Yates said, will depend on such factors as the type of construction, whether there are hurricane glass and roof tie-downs and how close the property is to a fire hydrant. “Remember, we’re still not insuring for flood [damage],” he said.

The fine print of coverage—exactly what is covered (some insurers have a deductible for any wind damage at all, for instance), what if any deductibles apply, and which companies have good reputations in terms of making payments to consumers—are all too often ignored, in Mr. Yates’s opinion. “I think we as an industry have done a great job of doing what’s cheap rather than what’s appropriate,” he said, also noting that if everyone has only, say, a $1,000 deductible, it’s going to limit the number of people who can get insurance as well as making premiums go up.

“It’s all about the balance,” he said. “In the business, you want to drive affordability and availability,” in part by “allowing your insurance company to spread the pain.”

“Sandy was a major flooding event,” Mr. Yates said. His company’s offices have seen damage throughout East Hampton and Southampton, most especially on Dune Road in Westhampton, which he said was “in a very bad situation right now.” He said it was too early to tally or even estimate the damages or the number of claims, as they could be expected to continue to come in for weeks.

“When I look at this and what we suffered, I think that we were truly lucky,” Mr. Yates said, adding that many homeowners in Staten Island and New Jersey may not even have had FEMA insurance and stood to lose both their homes and the properties they stood on. “The damage in southern Nassau, Queens, Brooklyn, New Jersey is profound, second only to Katrina in terms of the total dollars that are going to spent recovering from it,” Mr. Yates said.

“There are things that have limits,” Mr. Brenneman said, “but our experience is that after an event like this the insurance companies perform really well.”

Ms. Weinheimer said she would not expect future premiums to rise “just by virtue of the fact that there was a storm,” adding that many factors affect the size of homeowners’ premiums and that the insurance industry is “in good shape to handle this.”

“However,” she said from her office upstate, “as an industry it’s possible that if we end up paying out $15 billion worth of losses or whatever, even here in Syracuse, New York, we could see premiums go up.”

“If you think about Long Island even 20 years ago, it wasn’t as populated as it is now,” Ms. Weinheimer said. Today, in New York State, the “value of all the property along the coastline is more valuable than in Florida,” she said.

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The photos attached to the article are great and illustrate the damage done.

I must point out, however, that the yellow "home" which collapsed is part of a "hotel" which I believe is in Hampton Bays. Additionally, the large "home" listed as being between Quogue and East Quogue is the Neptunes/Drift Nightclub and is also located in Hampton Bays
By Nature (2966), Hampton Bays on Nov 8, 12 12:46 PM
There is one other certainty out of this storm is that all of our premiums will be going up. Hopefully, this increase will be moderate. Unfortunately, as I recall it was after Katrina that most major insurer's dropped clients and Long Island and many residents had to buy more expensive insurance from smaller carriers willing to carry the risk. Will they still be around after this storm? How solvent will they be?
By Toma Noku (616), uptown on Nov 9, 12 11:22 AM