Problems Obtaining Insurance
If you are unable to find an insurance company that will sell you a homeowners or tenants policy to provide coverage for your home and personal property, special insurance programs are available. Such programs may include coverage for residences located in flood prone areas. They include:
New York Property Insurance Underwriting Association (NYPIUA)
NYPIUA is an association of all insurance companies that sell fire insurance in New York State. Its Basic coverage form generally provides fire and extended coverage which include coverage for the following perils: wind (including hurricane), hail, explosion (except for steam boilers), riot, civil commotion, aircraft, vehicles, and smoke, as well as coverage for vandalism and malicious mischief. For a higher premium a Broad Form coverage form is available which includes coverage for the Basic coverage form perils plus coverage for the following perils: property damage by burglars (not theft of property), falling objects, weight of ice, snow or sleet, accidental discharge of water or steam, sudden cracking of a steam or hot water heating system, freezing, and sudden damage from artificial electric currents.
NYPIUA policies that include Broad Form coverage are subject to a 2% hurricane deductible for insured properties located in the following counties: Bronx, Kings (Brooklyn), Nassau, Queens, Richmond (Staten Island), Suffolk, Westchester. This deductible takes effect for hurricane losses twelve (12) hours before and after a hurricane category 2, 3, 4, or 5, as declared by the National Weather Service, makes landfall anywhere in New York State.
NYPIUA policies are generally offered on an actual cash value basis. However, policies written in conjunction with a voluntary market policy that includes an approved “wraparound” endorsement can provide building coverage on a replacement cost basis (see Coastal Market Assistance Program section for additional information).
NYPIUA policies do not include liability, flood, or theft coverage. Since coverage offered through NYPIUA is limited and sold at a higher premium than coverage offered in the voluntary market, you and/or your agent or broker should make every effort to get this insurance from a voluntary insurer.
Detailed information is available from the New York Property Insurance Underwriting Association, 100 William Street, New York, NY 10038, 1-212-208-9700, online at www.nypiua.com, or from any licensed agent or broker in this state. Outside New York City, the toll-free information number is 1-800-522-3372.
National Flood Insurance Program (NFIP)
Insurance coverage for losses resulting from floods is most likely not provided in a homeowners or tenants policy. Insurers are required to provide an annual policyholder notice to all homeowner and dwelling fire insureds advising that their policies do not provide coverage for loss caused by flood or mudslide and that insurance is available under a separate policy issued through the National Flood Insurance Program (NFIP).
The majority of New York State towns, villages and cities are participants in the NFIP. This program generally allows homeowners, tenants, cooperative apartments, and condominium owners and condominium associations to purchase insurance to protect their residences and contents against direct physical loss by flood, loss resulting from flood-related erosion and damage caused by mudslide.
Property owners can usually purchase insurance protection against losses from flooding through the NFIP even if they reside in a community designated as a special flood hazard area as long as it implements and enforces measures to reduce future flood risks. Residents of communities that participate in the NFIP are generally eligible for the Emergency Program that provides a limited amount of insurance at federally subsidized rates. Once a community adheres to the more comprehensive floodplain management requirements of the NFIP, residents are eligible for the Regular Program under which they can purchase much higher amounts of insurance.
Under the Dwelling Form and the General Property Form of the Standard Flood Insurance Policy, coverage limits up to $250,000 for the structure and $100,000 for contents are generally available in communities participating in the NFIP. Higher deductibles, over the standard deductible of $1,000, are available, which can help reduce the total cost of this insurance. The deductibles apply separately to building and contents, although both may be damaged in the same flood. Read the policy carefully for exact definitions of physical hazards and specific requirements that must be met before claims will be paid. In some instances, the amounts of claim payments are defined by statute.
Excess flood insurance is available from a few insurance companies. Excess flood insurance is a separate policy offering higher limits for flood coverage and is written over a primary policy.
The NFIP coverage typically involves a 30-day waiting period before the policy becomes effective, but there are exceptions. Additional information on this program can be obtained from your insurance agent or broker, or by contacting the NFIP at 1-888- 379.9531 or TTY# 1-800-427-5593, or online at www.floodsmart.gov or www.fema.gov.
Coastal Market Assistance Program (C-MAP)
C-MAP is a voluntary network of insurers and insurance producers that assist New York homeowners in coastal areas find insurance coverage. C-MAP is administered by NYPIUA.
The program is for owner-occupied, one-to-four family dwellings, apartment units, or condominium units located in the Bronx, Brooklyn, Nassau, Queens, Staten Island, Suffolk and Westchester. On Long Island’s south shore and forks, and in Brooklyn, Queens and Staten Island, the dwelling generally must be located within one mile of the shore. On the north shore of Long Island and in the Bronx and Westchester, the home must generally be within 2,500 feet of the shore to qualify for consideration.
Before applying to C-MAP, a homeowner must have received a non-renewal, cancellation, or conditional non-renewal notice from their existing insurer for a reason other than non-payment of premium. For new home purchases, applicants are required to identify the prior homeowners insurer. An insured can generally obtain coverage similar to a homeowners policy with the Basic or Broad Form coverage from NYPIUA, and the liability, personal property, theft and other coverage provided by a voluntary market policy (that includes what is commonly referred to as a “wrap-around” endorsement), from a licensed insurer participating in the C-MAP program.
NYPIUA policies are generally written on an Actual Cash Value basis; however, policies written in conjunction with a voluntary market policy that includes an approved wraparound endorsement can provide building coverage on a replacement cost basis. If a voluntary market policy includes hurricane coverage and insures building and/or personal property in excess of a NYPIUA policy, replacement cost coverage is available from NYPIUA for the personal property as well as the building.
For information about C-MAP, please contact NYPIUA at 1-212-208-9700 or online at www.nypiua.com
Homeowners Insurance in the Excess Line Market
Under certain circumstances prescribed in the New York Insurance Law and regulations, a property owner may purchase homeowners coverage from unlicensed companies. These unlicensed companies are called excess line insurers; a property owner must use a broker, known as an excess line broker, that is specifically licensed for this purpose in New York.
A property owner may obtain homeowners insurance from a New York eligible excess line insurer through a New York-licensed excess line broker only after coverage has been declined by at least three licensed insurers. Excess line insurers are exempt from New York’s rate and form filing requirements, so policyholders should read their excess line homeowners policy thoroughly. The coverage and deductibles in these policies may differ from those issued by licensed insurers. It should also be noted that in the event of the insolvency of an excess line insurer, the homeowner is not protected by the Property/Casualty Insurance Security Fund.