I-TEAM: Multiple insurance companies are no longer selling homeowners policies along the shoreline

Shoreline home insurance options dwindling
Published: May. 31, 2023 at 2:59 PM EDT
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(WFSB) - An I-Team investigation found your options for home insurance in Connecticut are dwindling.

State Farm announced this week it is no longer accepting applications for new homeowners policies in California.

Now some insurance companies are making changes to how they do business in Connecticut too.

Homeowners insurance isn’t required by law in Connecticut, but if you have a mortgage, your lender most likely requires it.

Agota Perry-Hill owns a home built in the 1960s in Madison. In early January 2021, her family discovered one of the pipes in the wall was hot glue-gunned together.

A slow leak left water damage and mold all throughout her kitchen.

“That small leak ended up being a $60,000 insurance claim on our house,” said Perry-Hill.

Insurance covered the repairs, but earlier this year they noticed a big difference in their bill.

“My husband noticed that our insurance payment went from $2300 a year to almost $11,000,” said Perry-Hill.

She and her husband then started shopping around for other insurance providers, but they learned it isn’t like it used to be, especially if you live near the cost.

Heidi Summa is the insurance sales director at William Raveis Insurance Agency. She’s been in the insurance business for more than 20 years and says when it comes to finding homeowner’s insurance for customers, right now it’s the worst she’s ever seen.

“It’s not as bad as Florida, but any of the coastal states will see that business is going to tougher to write,” said Summa.

Summa says last year both UPC Insurance and Narragansett Bay Insurance announced they would no longer write home insurance polices to anyone living in Connecticut.

Then just within the last few weeks, Summa says TypTap and Kingstone Insurance stopped doing new business in Connecticut too.

Summa says those four companies were some of the most common for homes along the shoreline.

TypTap is the only company that responded to the I-Team’s request for comment. TypTap confirmed it is no longer writing new policies in Connecticut starting June 1st due to “changing market conditions and the increased cost of reinsurance.” TypTap says the pause in new business will not affect current in-force policies or renewal offers.

“It’s getting to the point where the options for certain risks can become much lower than before,” said Summa.

Summa says just last week a Progressive representative came to her office to announce changes too.

Summa says Progressive will now only consider writing policies for people within 3 miles of the Connecticut coastline if the homeowner first pays for a new inspection report. Summa says in her experience, “sending the inspection report usually provides them with something they can use to not approve writing it.”

A progressive spokesperson told the I-Team they are still writing policies along the Connecticut coastline, but when the I-Team followed up and asked if there are new requirements the spokesperson did not respond.

Connecticut’s Department of Insurance told the I-Team it wants to reassure consumers that the insurance market is stable and coverage is currently available from over 140 carriers.

Summa says the reality on the shoreline is your options for a reasonably priced policy without a hurricane deductible are few and far between.

Summa says a big factor in all of this is the number of natural disasters across the country in the last few years. Plus, when hurricanes or wildfires destroy homes, they are more expensive to replace.

“Carriers have been paying out way more on claims. The cost of reconstruction, the cost of building materials, that’s all impacted the insurance market,” said Summa.

With fewer insurance providers writing new policies, there are fewer options for consumers, which normally means you end up paying more.

“I would say that I’ve been seeing on average 25-30% higher rates this year than over the past few years,” said Summa.

Summa says there are a few things you can control to get the lowest rate.

  1. Do your best to have a good credit score. “Most carriers base their rates on your financial responsibility score. If you’re not financially stable your rates are going to be higher,” said Summa.
  2. Upgrade your roof. “Roofs are a big thing. If you have a newer roof, you’re going to have a better position to be able to shop and get better rates on your insurance,” said Summa
  3. Don’t file small claims. “I look at home insurance for that major event: a tree falls on your house, you have a kitchen fire, any major claim like that obviously you need to file, but any little thing that’s going to be maybe $1,000, $2,000 dollars you don’t want to be filing those claims. They are just going to hurt you in the long run,” said Summa.

Having multiple recent claims on her record is what made it difficult for Perry-Hill to find new insurance at a reasonable price.

“It was stressful, you know, because you budget your insurance cost to be so much and then it skyrockets,” said Perry-Hill.

Perry-Hill worked with an insurance agent at Raveis to find a cheaper policy. As a realtor, Perry-Hill advises clients to factor in the current insurance market.

Connecticut’s Department of Insurance says it has not yet received any calls or complaints from people saying they are having difficulty finding coverage.

Full statement from the Connecticut’s Department of Insurance:

The Connecticut Insurance Department (CID) views the Connecticut homeowners’ insurance market as stable and would like to reassure consumers that coverage is currently available from over 140 carriers.

A handful of small carriers have notified the CID of their decision to place a moratorium on writing new homeowners’ insurance in Connecticut in part because of building material and reinsurance costs. The tightening of the reinsurance market, influenced by recent catastrophic events in the US including the impacts of Ian in Florida last fall, has led to rate increases for many companies.

The actions by these carriers will not have a meaningful impact on Connecticut’s homeowners’ insurance market. Notably, our Consumer Affairs Division has not received calls or complaints indicating difficulty in finding coverage in the state.

We encourage consumers who are encountering insurance coverage issues to reach out to us for assistance. Our department is here to help, and individuals can file a complaint or ask questions by visiting the File a Complaint or Ask a Question page on our website.