Anticipating destructive weather, the 'Good Hands' people cancelling 25,000 nationwide

Hundreds of Staten Island homeowners are being forced to look for other coverage because Allstate Insurance won't renew their policies, mirroring a nationwide trend in which the company is dropping housing policies from Washington state to Florida because of fears of destructive weather.

This is not the first time Allstate has limited the number of its policyholders here: In the mid-1990s, the company also stopped writing new homeowners' policies in New York City and on Long Island and didn't renew thousands of New York City customers after Hurricane Andrew's destruction in Florida in 1992.

"Why do we have insurance companies?" asked Bulls Head resident Gary Barton, an Allstate policyholder who said he has filed only a single minor claim in his 28 years with the "Good Hands" people.

"They can come up with a thousand excuses," Barton said. "Every house has some sort of culpability of damage to it. It makes no sense. Me being a loyal customer to Allstate for 28 years has no meaning."

FEAR OF HURRICANE

Allstate announced in February that, out of fear a major hurricane would hit the East Coast "in coming years," it would not renew about 25,000 current policies -- including hundreds on Staten Island -- and would stop signing new customers in New York City, Long Island and Westchester County.

While an Allstate spokeswoman wouldn't provide the exact number of Allstate's 38,000 homeowners' policyholders on the Island who wouldn't be offered renewal, saying the information was not available, she said the number is more likely in the hundreds, not thousands, in the borough.

"I'm not even sure it's in the hundreds," said Krista Conte, the spokeswoman, who repeatedly told an Advance reporter that the Island numbers would not be released. "We don't have that information and we're not talking about it."

The non-renewals in the mid-1990s cannot be compared to this year's because that number represented only 2 percent of the policyholders in the state, which is consistent with other companies' non-renewals each year, Ms. Conte said. Most of those non-renewals affected customers with multiple claims, she added.

This year, up to 4 percent of Allstate's approximately 640,000 customers in New York state are not being offered renewals -- most of them downstate.
The state Insurance Department says that an insurance carrier is permitted to non-renew up to 4 percent of its policyholders in the state each year.

"There is no insurance company that renews 100 percent of its customers," Ms. Conte said.

Superintendent Howard Mills of the state Insurance Department will hold a meeting on the Island in late August -- a date has not yet been set -- to discuss what affected customers can do to find other insurance carriers, said agency spokesman Michael Barry.

"Allstate's the only one issuing non-renewal notices that we know of," Barry said.

But he added that Nationwide is limiting the new policies the company is writing in coastal areas and MetLife is not writing new homeowners' policies in the downstate area.

UPSET POLICYHOLDERS

More than 50 homeowners have recently contacted the Island's elected officials, community boards and the Advance to vent about being dropped by Allstate.

Agents for other insurance companies estimated that the number of Islanders looking for new insurance is in the hundreds, though they couldn't provide specific figures.

"I see no justification," said Huguenot resident Marina Loprena, who was informed in March that her homeowners' policy would not be renewed. Ms. Loprena, who works for insurance company AIG, said she doesn't understand why companies drop policies because they pose a risk to the company. "To me, this is what insurance companies are for. I don't think they should drop us because they think anything's going to happen."

Added Charles Diaz of Port Richmond, who had his policy renewed in March after first being told he would have to find another company: "I don't know if I can trust them. Why be an insurance company if you're not willing to take a risk?"

Besides the New York metropolitan area, Allstate also is dropping about 350,000 of its 529,000 home policies in Florida after recent active hurricane seasons, and most of its 407,000 earthquake policyholders nationwide, according to news reports.

FACTORS CONSIDERED

Ms. Conte said the decisions not to renew policyholders are based on such factors as how a house is constructed, whether a customer has multiple policies with Allstate and how many claims they have made. It is not based just on whether homeowners live near the water, as falling trees in a hurricane can inflict as much damage as water, she said.

Allstate, which has a 26 percent market share among homeowners' policies in the city, Long Island and Westchester, feels it needs to lower its risk in those eight counties, Ms. Conte said.

"We have more risk by far than any other carrier," Ms. Conte said, adding that affected customers will be directed to agents who can help them find insurance with other companies. "We have a responsibility to the large majority of our customers to manage that risk.

Co-op, condominium and renter's insurance holders will not be affected by the action.

WEB SITE

A Web site dedicated to people who are livid with Allstate -- www.allstateinsurancesucks.com -- urges people to describe their negative experiences with the company.

"Been victimized by Allstate Insurance Company? Need to vent your anger? Need to communicate with others that have been abused like you?" the Web site reads. "Then this is the place! This site is here for you!"

"My house is 90 years old, miles from the shore and has never had damage due to weather," writes David Fitzgerald of Brooklyn, who wasn't offered a policy renewal. "Nor for that matter has any house around here. They have some [nerve]."

As for Barton, he said he called State Farm Insurance and was offered a policy worth $100,000 more than the one he had with Allstate for about $100 less per year.

"They've done me a favor by dropping me," he said. "I'm going to write them a thank-you note."

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By GLENN NYBACK
STATEN ISLAND ADVANCE

Glenn Nyback covers environmental news for the Advance. He may be reached at nyback@siadvance.com.

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