Obtaining N.Y. Coverage Near Water Can be Tricky

In New York, particularly on Long Island in Nassau County, Suffolk County, Queens County, Brooklyn County, and Richmond County in Staten Island, homeowners may be faced with the prospect of trying to obtain home insurance (or having existing insurance) for a home that they own which is on or close to the water. In recent years this has become a complicated challenge.

Most insurance companies have restrictions based on the home's proximity to the ocean and other tidal waters, therefore, it becomes important know the obstacles you are up against BEFORE you purchase that dream house. The cut-off for most companies is 2,500 feet from the ocean or tidal bay, although this may vary.

In recent years, the increased hurricane activity and the over-development along waterfront property has put more homes in harms way of wind and water damage. To limit exposure to these catastrophic storms and hurricanes, many insurance carriers have introduced wind or hurricane deductibles into their policies. This deductible typically can be 2%, 5% or 7% of your dwelling coverage, which can be a hefty amount. For example, if your dwelling coverage is $250,000, your 5% deductible will be $12,500. You should therefore review your home insurance policy and understand this important deductible language.

You must understand:

1. What % deductible your policy carries (2%, 5%, 7%)

2. What triggers the deductible to apply (a windstorm, a category one or category two hurricane).

Another important consideration when insuring your home near any body of water should be flood insurance, as your home insurance policy will not normally cover damages arising out of a flood. In New York, companies selling the National Flood Insurance policy can help you with this coverage. The Federal Emergency Management Agency (FEMA) has established flood zones for your home's location and the insurance premium will be based upon that flood zone. For example, premiums for $250,000 of dwelling coverage will range from $338 annually in the most desirable "X" zone and could be as much as $1,000-2,000 in the more vulnerable "A" zone.

As insurance companies re-evaluate their risk management in the New York coastal areas it is more important than ever to continually review your home insurance policy and set up a meeting with your agent to make sure you are properly covered. The cost for this "insurance check-up" should be free, and could give you some much needed peace of mind knowing that you are properly covered before disaster strikes.

If you are one of the unfortunate policyholders that have received a non-renewal notice due to your home's location you should not panic, as you will have a couple of months to secure new coverage. First, try and get a referral from the company that is cancelling you, as they may have a relationship with a local broker that is able to write your insurance. And secondly, make sure you try and stay with a financially secure and reputable company.