Imagine this scenario: you are in the process of purchasing a small home on an island, far from the mainland, to be used as a summer place. You are not a movie star or a corporate heir…you are a schoolteacher from Pennsylvania. As your career obligations will not allow you to be within 500 miles of your place during the winter, you are arranging for telephone service to be put on “winter disconnect” for half the year. You shop for a homeowner’s policy, required of course by the bank in order to secure the loan to buy the house. You anticipate no particular difficulty obtaining an insurance policy, as you are already undertaking logical upgrades to the house, such as a new roof.
The insurance company says something like this: “We will insure this house if you install a system that will contact you or a security company by telephone if the power goes out.”
Do we need to go over the details again? The owner is not in the area. There is no “security company” that could respond to this island address. There isn’t even any telephone much of the year. Finally, who cares if the power goes out? The place is entirely winterized!
For the last several years, islanders (full-time and seasonal alike) have been receiving some distinctly bizarre news from the carriers of their homeowner’s insurance. Many insurers have been up front about explaining that they “do not wish to insure island properties.” Islanders who have never filed claims have seen their premiums rise enormously. Insurers cancel policies for reasons which appear unrelated to proven risk The insured homeowner of record dies, but the surviving family is still there…sorry, policy canceled. The single granite block doorstep, part of the house for 200 years, is declared a dangerous set of outside steps. The attack on American cities on 9-11 is used as an excuse to raise premiums on low-income homeowners in Maine. An islander is told he or she cannot have a policy anymore, after years of payment, because they “do not have a real address.” An island propane dealer is told that he might be able to purchase a homeowner’s policy through Lloyd’s of London, at no small expense, if he moved the propane business off of the property. To where…the local industrial park? Be serious. Of course, the propane is already insured, by the company…that isn’t the issue.
A major source of aggravation, to say the least, has been the fact that homeowner’s insurance is normally a requirement, not a choice, when a mortgage is secured. If a policy is required, then it stands to reason that it must be available. Island home buyers have had (we hear) quite a bit of trouble finding policies.
Another issue has been the inconsistency that is evident. Islanders state that they are not all treated equally….For example, we’ve heard a story of two homeowners on the same island, with very much the same circumstances, where one is sold a policy while the other is not. Or, one summer camp owner who is very close to the ocean is told he need only put up a small railing around his deck, while another, considerably further from water’s edge, is told he is simply “too close” to the water to be insurable.
Islanders hear stories such as these while loitering around the post office, waiting on the wharf for the ferry, leaning over the hood of the pickup gabbing with the neighbors. This is nothing but anecdotal evidence of a problem, but there do seem to be more and more of these anecdotes! There does seem to be a problem.
The Maine Islands Coalition (MIC) meets quarterly with legislators and others who take an interest in issues relevant to islanders. The coalition is made up of appointed representatives of each island community from Casco Bay, Penobscot Bay and further downeast. MIC would like to hear your homeowner’s insurance story. Has your insurer raised the rates considerably for no particular reason? Has it asked questions or made demands that seem unrelated to your property or to your community? Has your policy been canceled through no fault of your own? Or, on the contrary, have you found an insurance agent who works well with your island community?
Several months ago, the coalition sent out a survey to residents of several islands, asking some general questions about satisfaction with the homeowner’s insurance process. Many responded with something like this: “I’m fine so far, my rate is still reasonable, but I’m scared. I don’t dare to upgrade my policy, even though I’d like to, and I don’t dare to shop around, and I’d never dream of making a claim! My neighbors have had huge problems with homeowner’s insurance…I don’t want to attract any attention.” This indicates that people are paying for a service they don’t dare use, and are in fear of a company that is supposed to be a source of security and reassurance. Something’s wrong with this picture!
The cost of insurance is bound to increase, along with the cost of everything else. We are not suggesting that insurers be charities, or that they assume unreasonable risk, or that the local agent is the cause of the problem. Still, we hear again and again how people who have never made claims, in communities with a low incidence of claims, are suddenly declared “high risk.” Why would island homes be any more “high risk” now than ten years ago? If anything, fire protection continues to improve in most communities (to be sure, an island fire department does not have access to the mutual aid and the extensive equipment that a mainland department does, but they certainly did not have these in the past either, when homeowner’s rates were typically stable and relatively low.
Documentation of these concerns will not result in a “quick fix.” It is our intention rather to keep this concern on the top of the pile, as it were; to remind those in positions of responsibility, such as state legislators, that Maine citizens have a grievance. We would like to collect input from Maine islanders, year-round, summer, and part-time, particularly from those who have experienced what they consider to be poor customer service, arbitrary decisions, unfair rate changes or policy changes, or other unexpected curve-balls from their insurer. In particular, we would like written evidence of this assertion that “we [the insurer] do not wish to insure island homes.”
The Maine Islands Coalition will not be able to recommend an insurance agent. This fact-gathering effort is not for the purpose of comparing rates, nor is it intended to gather personal information. We are concerned with the insurance companies themselves, not the local agents — agents who, as a rule, would be happy to sell insurance; it is certainly not their fault that the insurers do not wish to do business with island residents. This is not an insurance industry study, and data will not be analyzed by experts in that field. We are looking for “proof on paper” that this complaint is widespread, significant in Maine, and genuinely a problem.
— Eva Murray, Matinicus