PIANY supports incentives for insurance companies to provide industry-standard coverage to homeowners who obtain coverage through the state’s Coastal Market Assistance Program
Memorandum in support of:
6266—by Sen. LaValle
9280—by M. of A. Sweeney
An act to amend the Insurance Law, in relation to members of the New York Property Insurance Underwriting Association (NYPIUA) who write insurance policies that include coverage for windstorm in coastal areas
PIANY supports the intent of this legislation, which is to upgrade the coverage typically provided to applicants for homeowners insurance through the Coastal Market Assistance Program (C-MAP) and provide greater incentives for more insurers to participate. Created over a decade ago, the C-MAP is a voluntary market solution to match willing insurers with homeowners whose coverage has been terminated through no fault of their own or who need a new policy to protect a newly acquired home.
C-MAP’s importance is highlighted by the findings of the Insurance Department, reported at public forums initiated by the Senate Insurance Committee in October 2007 and Assembly Insurance Committee Chairman Joseph Morelle in May 2008, that insurers plan to nonrenew as many as 200,000 policies covering homes in coastal areas. Our members report great difficulty in finding replacement coverage for some of these homeowners.
However, some PIANY members also report a reluctance to direct members to C-MAP because of coverage issues posed by its typical coverage configuration. Members report that C-MAP carriers are not choosing to offer full homeowners policies; nor are they choosing to provide the C-MAP “wrap-around” coverage form that would provide the best coverage when combined with a policy from NYPIUA. Rather, they offer only the “HO-4” wrap-around when participating in C-MAP. This program can result in pairing two policies whose coverage terms are inconsistent: combining basic property insurance coverage available through NYPIUA with an HO-4 “wrap-around” policy provided by a voluntary market insurer. The coverage issues this creates are summarized by PIANY in its QuickSource document No. QS31240, entitled “Wrap-around options for coastal homeowners risks.” (attached).