The scenes are indelible: uprooted trees strewn across roadways. Windows broken. Streets flooded. Roofs torn from the homes they were designed to protect. Hurricanes are chaos machines, generating fear and destruction wherever and whenever they strike. Their after-effects can reverberate thousands of miles away and for years after they hit, especially when it comes to insurance coverage.
The after-effects of the catastrophic storms that hit Florida in 2004 as well as the unforgettable aftermath of Hurricane Katrina have been felt in the form of increased premiums and policy non-renewals for millions of New England condo owners who live all along the Atlantic seaboard. These changes have made it extraordinarily difficult to secure affordable coverage—or any coverage at all—for many New Englanders.
For most inland condo owners, a simple homeowner’s policy is enough coverage to protect their home and everything in it. In fact, traditionally, even hurricane damage would be covered under a homeowner’s policy. “Wind, fire, lightning, theft are all covered under the regular homeowner’s policy,” says Jamie Trussell of HUB International New England in Newburyport, Massachusetts. “No additional coverage is needed and there is no need to go buy a separate wind policy.”
But residents living along the coastline, or near a lake or river, should also carry a separate flood policy. “You definitely want flood coverage if you are anywhere near the water,” says Amy Bach, executive director of United Policyholders, a consumer advocacy group based in San Francisco. Flood insurance is important because the wind portion of a homeowner’s policy only covers “shingles that have blown off, siding damage or damage from wind-driven rain,” Trussell says. Flooding that comes from rising waters or ocean or river surges are not covered.
While those two policies—homeowner’s and flood—have been par for the course for the last few decades, things have started to change in recent years. “We’ve seen a lot of smaller companies that are no longer giving policies out in coastal areas,” says Paula Aschettino, chairperson of the Cape Cod advocacy group Citizens for Homeowners Insurance Reform. “Private insurance companies are handling current policies but are not taking new clients—which means there is a lot less new opportunity for comparison shopping and as a result, rates have gone up.”