New Coalition Launched to Battle New York’s Rising Insurance Costs

Homeowners are facing an insurance affordability crisis, squeezed by the triple threat of skyrocketing premiums, shrinking coverage, and vanishing options.

New Coalition Launched to Battle New York’s Rising Insurance Costs

In an effort to confront New York’s rising insurance costs, a coalition of citizens, advocates and organizations has recently launched Citizens for Affordable Rates (CAR). The group contends that home, auto and health insurance costs have become a growing burden for both families and businesses, cutting into budgets for groceries and other daily essentials.

This comes off the heels of the deadly California brushfires, with many larger insurance carriers abandoning high-risk areas, or planning premium hikes nationwide to cover the escalating costs of claims.

Citing a recent Siena College poll indicating that 43% of New Yorkers view insurance affordability as a top priority, CAR is now embarking on a grassroots mobilization of consumers, legislative and regulatory advocacy, and an ad campaign to push for reforms to reduce insurance costs throughout the Empire State.

“Homeowners are facing an insurance affordability crisis, squeezed by the triple threat of skyrocketing premiums, shrinking coverage, and vanishing options. Many are being pushed into bare-bones policies or left without coverage altogether,” said Nada Khader, WESPAC Foundation Director. “We've heard horror stories of downstate homeowners reporting renewal rate hikes as high as 300%. In Westchester, average home insurance costs have soared 48% since 2020. We need to confront the root causes of these exorbitant costs and demand reforms that deliver affordable insurance. No family should be priced out of their home or their community.”

Based in Westchester County, WESPAC Foundation is one of the many coalition members comprising CAR and has been a leading force for progressive social change since 1974. WESPAC joins the Council of Peoples Organization, DSI International Inc., the Bangladeshi American Community Development and Youth Services, and Haitian Americans United for Progress, Inc., all located in New York City.

According to CAR, escalating insurance premiums are contributing to increased rents and mortgage payments, in some cases with insurance costs of up to 15% of rent expenses in New York City. CAR also notes that low-income families are disproportionately burdened, as rising premiums are consuming a larger share of their overall living budgets.

JoAnne Murray, president of Allan Block Insurance in Tarrytown, can attest to the fact that insurance costs are indeed rising. “When you see what’s happening in California, plus flooding in North Carolina and Florida hurricanes, insurance companies are also being hit hard when it comes to paying claims,” she explained. “The cost of materials and labor to rebuild is also higher—into the millions—and insurance companies can’t function if they don’t make some money.”

Allan Block, an independent agency, works with many different carriers. “We see a lot of big companies have already pulled out of California due to wildfires and earthquakes,” Murray said. “A lot of others may end up going out of business.”

In the greater New York metro area, said Murray, one of the biggest concerns is wind damage. In upstate New York, it can be freezing pipes due to extreme cold temperatures. “The insurance companies have a ceiling to handle certain losses, but after that’s used up, they have to rely on re-insurance,” she said. “In the past few years, the costs of re-insurance have gone up dramatically, and those costs unfortunately are passed on to consumers.”

Murray noted that in Florida, where there are greater risks of hurricanes, insurance premiums for a typical middle-class home may run about $10,000 annually. For luxury homes, that cost could rise to $60,000 a year. “Some $1-million-plus priced homes in Westchester may get up to $4,000 a year for premiums, but this is without flood insurance,” she added. “If the home is in a flood zone, premiums could cost thousands more.”

Bradford Lachut, Director of Government & Industry Affairs for the Professional Insurance Agents (PIA) Northeast division, noted that while rates are high, the good news is that they may begin to stabilize. “Don’t expect rates to go down, but I don’t think we’re going to see any real drastic upticks in rates,” he said. “We’re also working to get more carriers to come into New York to help keep the costs stable.” The PIA Northeast division represents New York, New Jersey, Connecticut, New Hampshire and Vermont.

Lachut echoed Murray’s sentiments about re-insurance driving costs higher. “Re-insurance is global, so if there’s a disaster somewhere else in the nation, or the world, that could affect all of the rates,” he explained. “I think the California wildfires may have an impact on us next year.”

Condo, co-op and rental apartment dwellers may also see insurance rates rise. “While renters don’t own the property, it’s still important for them to have insurance to cover any potential loss of their possessions,” Lachut added.

Donn Gerelli, of Donn Gerelli Insurance Agency Inc. in Croton-on-Hudson, has been handling master policies for local condos and co-ops for many years and blames re-insurance costs as part of the reason why premiums are soaring. “Prices have gone up tremendously—even with no claims,” he said. “In some cases, we’ve seen increases of up to 15%—that’s a huge number.”

Another reason why rates have escalated is because of New York’s labor laws and liabilities when someone is hurt on the job. “If a condo board hires a contractor and this person falls off a ladder or becomes injured somehow, he or she is entitled to workman’s comp and also has the option to sue not only the employer, but also the property owner for an unsafe workplace,” he explained.

Gerelli noted that single-family homeowners can keep costs from escalating by opting to handle smaller claims themselves while saving any larger ones for the insurance firms. “I try to help my clients by making them aware of how insurance companies think,” he said “It’s always frequency vs. severity. A lot of smaller claims will add up and hurt them financially more than just one larger claim. I suggest homeowners talk with their insurance brokers before deciding to put in a claim.”

In the meantime, CAR is committed to advocating for fair and equitable rates, ensuring that they reflect actual risks, not arbitrary factors. The group is also calling for more transparency in insurance practices and working to engage with policymakers on the state and local levels to push for reforms to lower insurance costs, while still protecting consumers.

Author
Mary Prenon

HGAR, Director of Communications

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