When Lidia Miller of Jamaica opened the mail recently, her eyes welled with tears. She would have to pay $1,129 for her Allstate home insurance this year, a $234 increase from the previous year, and an even larger jump from the year before when she paid $790.
Miller said while home foreclosure is a crisis for people who can’t meet exorbitant mortgage payments, soaring insurance rates are hitting seniors particularly hard.
“Where am I going to get the money to pay?” she asked inside her 105th Avenue home last Thursday, where she has lived since 1990. “It’s frustrating.”
Miller is not alone. According to the Manhattan-based Insurance Information Institute, home insurance rates have steadily climbed in the last several years. The national average was $729 in 2004, and rose to $835 in 2006. The institute expects it to increase again this year.
The trend is especially strong in coastal areas and in high-priced markets like the New York metropolitan area, where the estimated value of all property is $1.9 trillion. It would be the second most-expensive area in the country, behind Florida, to rebuild after a hurricane.
That risk exposure has led some insurers to drop policyholders completely. Last year, Allstate cancelled thousands of policies in the New York City region, which the company labeled a “catastrophe prone area.” Queens’ coastal areas, especially the Rockaways, were singled out as being particularly at risk.
Mike Barry, a spokesman for the insurance institute, said meteorological predictions weigh heavily on insurers. “They are looking at hurricane risk. We’re entering a period of the next 15 years where there’ll be an increase in frequency on the eastern seaboard,” he said.
Barry noted that a home’s distance from water is also a factor when determining premiums. Homeowners on the north side of Long Island will pay less than those on the south side, since homes closer to the Atlantic would incur more wind damage.
The confluence of all those factors leaves seniors like Miller stumped over how to pay her bill. Now age 67, she is a retired home health attendant and lives on a $650 monthly Social Security payment, the $1,000 rent she receives from an upstairs tenant, and help from a son who lives with her.
Miller makes the most of her dwindling resources, but has considered moving. Barry suggested she should shop around for a new insurance policy if the payment is too steep. “It’s a competitive market, try and get competitive bids. You can compare notes with neighbors,” he said.
Bayside Assemblywoman Ann Margaret Carrozza, who practices elder law and sits on the Assembly’s Insurance Committee, said providing consumers with valuable information on rates is missing from the New York system.
In states like Texas, where natural disasters occur frequently, there is an advocate office for insurance consumers where people can compare rates and receive advice.
New York needs the same, Carrozza said. “The consumer needs an advocate to level the playing field,” she added. “Why do insurance companies charge so much? It’s because we let them.”
Miller said she would like to see someone fight for them. “It’s killing us,” she said. “If the community makes a big noise, maybe something will happen.”