Late lastÂ month, I had the pleasure of enjoying another terrific pizza with Anne-Marie Stanislaus,Â one of New York City's leading independent Real Estate Brokers, andÂ the Owner and PrincipalÂ of Reserved Realty LLC.Â Â We met at the number-one Italian restaurant in Prospect Heights, the world-famous Cataldo'sÂ ItalianÂ Restaurant and Pizzeria, at 554 Vanderbilt Avenue, between Dean and Bergen Streets. The first question she asked was "Eustace, I know we talked about this last year, but what's going on with the coastal homeowners insurance business in Brooklyn? Companies are not just refusing to writeÂ certain types ofÂ houses. I'm getting calls from clients complaining their insurance companies, after decades without claims or late payments, are cancelling policies in certain areas like they had the plague! And not just in Brooklyn, mind you, but throughout the Downstate region."
We'd had a similar discussion back in November of 2012, right after Hurricane Sandy, which I detailed in an earlier post on my BrooklynCovered.com blog titled, "Coastal Homeowners Insurance, Part 2.9." Back then, when life seemed simpler,Â we were more concerned about changed real estate practices as it pertained to new sales.
The insurance situation is becoming more difficult not just for new home buyers but for existing homeowners too. In between bites, I reminded Anne-Marie about how Hurricane Irene in 2011, and the big momma, Hurricane Sandy in 2012, gave insurance companies a major case of the willies and greater insight into the number of coastal homeowners insurance risks they insured in certain now-hazardous areas. It is these new insights which created newer realities in coastal homeowners insurance.
First, when certain companies decided they no longer wanted to insure risks within one (1) mile of a tidal coastline, they just sent the affected policyowners a letter which basically said, "Thank you for being our homeowners client for the pastÂ 15, 20, or even 30 years. We also appreciate your not presenting us with any claims during your years with our company. We changed our underwriting guidelines, and since you no longer fit or match them, you're no longer one of our homeowners insurance clients effective (You fill in the date.).
"Thank you, and don't worry, you can still keep your auto, life, and whatever else you have with us. We just don't want the house anymore."
Now, just for the record, while most insurance companies pulled their coastal boundary line to a distance of at least one mile from the tidal coastline for dwellings, there are those companies who will continue to honor their commitment to their clients, so long as they don't lapse their policies, submit some really dubious claims, or decide they can make some side money by turning their legal two-family home into an illegal three, four, or even more family house.
Many companies, however, are simply dropping their clients, and, just like that, the homeowner must seek and secure new coverage for their home.
There's a new twist in this tale of woe, however: Now some insurance companies are cancelling policies if they are within one mile of any body of water.
For example, I've recently written a new policy for a homeowner who lives more than one and one-half miles from the tidal coastline, but within one-half mile of the tip of Brooklyn's Paerdegat Basin.
A property on the western side of Flatlands Avenue. One which suffered absolutely no wind or flood damage during Hurricane Sandy.
He recently received a cancellation letter letting him because of changes to what the company felt was a coastal risk, his policy was being non-renewed. A policy he'd had for 28 years. Claim-free.
And now, I'm going to write his neighbor a policy, since the same company just sent him his non-renewal letter.
So Anne-Marie looked at me like I had two heads. "So wait a minute," she asked. "Now we've got to know how far a property is fromÂ any body of water before we try to market it? When will this madness end?"
"Who knows? Probably when enough disaster-free and thus heavy-claim time passes. "
She looked at me and said, "Well, that's not so bad then."
"Sure", I said, "Even though when FEMA finishes remapping this region, probably either in late 2014 or by mid-2015,Â mandatory Flood Insurance policies with premiums in excess of $2,000 and $3,000 will create new problems for homeowners now remapped into AE and VE zones..."
"Enough!" she yelled. "For that Greaves, I want more pizza! And no more insurance talk!"
And the second pie was even tastier than the first.
You can reach the beleagueredÂ Anne-Marie Stanislaus at 917-887-7468. She and her team at Reserved Realty will do a fantastic job ofÂ either helping you find your dream home, or marketing your current home and apartment rentals. You can always reach Eustace Greaves Jr., LUTCFÂ by telephone at 718-783-2722, or send him an email to Eustace@insuremeeg.com.