Climate change drives up homeowners’ insurance rates in tri-state area

When a city burns in California, insurance rates go up in New York. An increase in natural disasters fueled by climate change in recent years, such as wildfires in the American West and flooding and other severe weather in the Northeast, has caused insurers to increase rates here, in some cases drastically, pix11.com reports.

A detailed analysis from S&P Global Market Intelligence shows a significant cumulative increase in homeowners’ insurance since 2018 throughout the tri-state area. The spike is 19% in New York; 15.4% in New Jersey; and 23.4% in Connecticut.

Those figures are for 2023, compiled just under a year ago, and those increases are average amounts. In other words, while some homeowners’ rates have gone up moderately, some other residents’ rates, especially in multi-unit condos and co-ops, have increased by as much as 300%. When the 2024 year-end analysis is completed later this month, the rates are expected to rise even more dramatically.

“I’m afraid that insurance companies that do business here, as well as in California and other parts of the country where there’s more of a problem, that they will be raising premiums in New York to compensate for losses in other parts,” says state Assemblymember David Weprin, a Queens Democrat who chairs the assemblly’s insurance committee.

Weprin has gotten legislation to heighten scrutiny of insurers in New York State passed in both houses of the state Legislature, only to have them vetoed by Gov. Kathy Hochul. He’s now working on the issue with New York’s Department of Financial Services, the agency that regulates insurance companies.

With a new legislative term beginning this month, Weprin says he’s convinced that strong scrutiny is in place over insurance practices, but he’s willing to use all available options. “We might have to do some legislation in that area,” he says, adding that natural disasters that have increased in number and intensity have put the state in a position where it has to be vigilant against some insurers.

While wildfires broke out recently in New Jersey and Brooklyn, a much more pressing concern in this part of the country is flooding exacerbated by climate change. In neighborhoods between the tidal waters of Long Island Sound and I-95 in such New York coastal communities as New Rochelle, Mamaroneck, Larchmont, and Rye, some insurers have designated those areas coastal flood plains, according to some local residents. They complain that even though many of the homes in the neighborhoods are on hills well above sea level, they’re having to buy insurance to protect against low-lying area floods, at rates that have risen significantly in recent months.

“I’m scared to death,” says Gail Schaffer, a homeowner in an area designated a coastal flood plain. Her fear is deepened by the fact that her insurer dropped her flood insurance policy, and she can’t find any other insurance company that will take her on.

“I can’t move,” she says. “I’ve been here too long, so I’m stuck.”