Insurer is latest to cite liability risks if major predicted storm hits; state department says it is "concerned"

With New York State Insurance Department officials expressing concern, Travelers has become the latest insurer that will limit homeowners policies on Long Island.

[Clarification: A Travelers spokeswoman said Wednesday that the company will renew some homeowners insurance policies on Long Island "that meet the company's underwriting guidelines." Newsday reported Tuesday that Travelers will no longer offer policies on Long Island. The spokeswoman declined, for competitive reasons, to say what the criteria would be to meet the company's guidelines.]

Travelers cited the liabilities it would face in the event of violent hurricanes predicted to hit the region in the next few years, officials of the St. Paul, Minn.-based company confirmed yesterday.

Allstate, MetLife and Nationwide have already either halted all homeowners policies on Long Island or limited the number that they will provide.

Jennifer Wislocki, a Travelers spokeswoman, said the company decided to stop offering some homeowners policies on the Island after a routine review of its "risk exposure."

Wislocki said that less than one half of 1 percent of the company's policies in New York State would be affected by the decision, but most of the affected policies are on Long Island.

Wislocki said Travelers does not make public the number of policyholders it has, but she said the company holds an 11 percent share of the homeowners market in the state. Allstate is the largest, with 18 percent.

Wislocki said that the nonrenewals will be spaced over the next three years, and policyholders will be given 90 days' notice of the cancellation.

Travelers said it decided to stop offering homeowners policies after studying reports by government and private meteorologists that a major storm is likely to hit Long Island and other coastal areas in the next few years.

Weather experts have said the United States is in a cycle of severe storms that may strike coastal areas within the next decade and a half. Insurers lost $40billion as a result of damage from Hurricane Katrina.

Andy Mais, a spokesman for New York State's insurance department, said the agency is "concerned" about the number of insurers who will no longer offer homeowners policies. An insurance company is prohibited from failing to renew more than 4 percent of its total homeowners policies. So far, none of the insurers in the state has violated the regulation.

"We are limited as to what we can do" unless the regulation is violated, Mais said. "But the concern is a national one. Coastal insurance is more difficult to find and more expensive all over the country."

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BY JAMES BERNSTEIN
Newsday Staff Writer

Copyright 2007 Newsday Inc.