Lawmakers in New York said they want to craft legislation that will help combat the rising costs of homeowners insurance across the state, but they are unsure what's behind the price hikes.
So, what's driving up premiums? Extreme weather events and the rising cost of reinsurance. That's what insurance industry experts said in a daylong public hearing state Sens. James Skoufis, Jamaal Bailey and Brian Kavanagh held in Albany on Tuesday.
Lawmakers must encourage more insurance companies to enter the New York market and motivate companies already here to write policies in all corners of the Empire State, Cassandra Anderson, president of the New York Insurance Association, told lawmakers. "The only way to make insurance more affordable is to make it more available."
The number of residential insurance policies written in New York decreased from 3.8 million in 2020 to 3.4 million as of November, according to state data.
Robert Gordon, senior vice president of research for the American Property Casualty Insurance Association, stated that New York needs to take additional steps to encourage residents to install storm shutters, shatterproof glass, and other measures that protect a home against extreme weather events. The incentives could come in the form of tax credits, waivers, grants, loans, or free inspections from city or state officials once they are installed, he said.
These kinds of building and renovation projects will decrease the chances that a home will be destroyed and that an insurer will have to pay out claims, Gordon and the other experts said.
The hearing was part of a larger investigation that Skoufis, Bailey and Kavanagh launched in August to address insurance concerns. The lawmakers said they've been fielding complaints about policy rate increases. Bailey said the hearing was "not an attack on the insurance industry," but an avenue for understanding what is affecting the residential casualty market.
Rising insurance costs are a problem plaguing homeowners nationwide.
Premiums triple for some New Yorkers
Premiums in New York have increased 13% between 2021 and 2024, according to the Consumer Federation of America. The lawmakers said they've heard tales of homeowners who saw their premiums double or triple. Some residents lost their coverage altogether.
Despite that rise, New Yorkers pay below the national average for property insurance — $547 a year per policy, Kaitlin Asrow, the acting superintendent of the state's Department of Financial Services, told lawmakers. The department regulates insurers.
During the hearing, lawmakers asked the experts why some insurance companies have stopped writing policies in New York and why some have increased premiums. The experts said insurers had to pay out billions of dollars in damage claims for Hurricane Sandy. The superstorm left an impression on insurance providers even though it happened 13 years ago, and the state hasn't seen a disaster of that size since, the experts said.
"New York has been lucky, but it will get its next Hurricane Sandy, and that's what insurance companies have to prepare for," Gordon told lawmakers.
Insurance companies have also been following weather forecasting models, and New York's coastline will one day suffer another catastrophic weather event, they said. Some insurance companies have decided they don't want policies in New York on the day such an event happens.
More than 78% of New York's population — nearly 16 million residents — live in coastal areas, Asrow said.
"They know the big one is going to hit," Gordon said. "They just don't have the capital to allocate for when it does."