Updated, Dec. 12
Home insurance on Martha’s Vineyard is getting harder and harder for locals to obtain, as several mainstream providers have pulled their coverage from the Island.
Plymouth Rock, Narragansett Bay Insurance, Openly, and Swift are among the bigger names and more reliable providers that have recently pulled coverage plans — some entirely — from the Island, according to local agents, and some just within the past year.
Local agents say a large reason for the volatile market is climate change: Stronger hurricanes in Florida have increased costs around the country, and made companies hesitant to insure in coastal areas. Wildfires in Hawaii and the West Coast and the inevitability of another major hurricane hitting Martha’s Vineyard have also contributed, leaving Islanders with fewer options.
The big names in insurance are finding it more lucrative to abstain from coverage in areas that are at risk of flooding, high winds, or fires, leaving smaller agencies and homeowners to scramble. With many of the larger insurers out, local agents say that there’s less competition, and that can make prices rise.
“I’ve never seen anything like it,” said Paula O’Connor, the vice president of Vineyard Haven–based Mone Insurance. “We’ve never experienced this before.”
O’Connor has worked in the local industry for more than 35 years. According to her, the high cost is making home insurance unobtainable for many Islanders.
O’Connor stated that most of their clients at Mone are seeing an average price increase of about 30 percent this year. One homeowner, for example, just saw an increase in their premium from $13,000 to $35,000.
In the current market, it has become more commonplace for insurance companies to non-renew their clients, even after covering their home for years –- which has influenced some homeowners to forgo home insurance completely, or alter their plans to be more affordable, O’Connor said.
She fears that premiums will continue to go up at unprecedented rates.
The local agent said that she started to notice a change after Hurricane Ian two years ago. While the hurricane mainly struck Florida, it was the third costliest of all hurricanes in U.S. history. Billions of dollars were spent on rebuilding.
The hurricanes that ravaged Florida again this year caused insurance companies to buckle down even harder on premiums and general availability, especially along coastal areas. When there’s a natural disaster, even if it’s far away, insurance rates are affected — companies react to high payouts for some areas by increasing the cost of premiums in others.
Other local agents are optimistic the Island will be OK, and that the market will improve. Joe Gervais of Tashmoo Insurance agreed that Island homeowners are having a difficult time now, but believes the market will have ups and downs, no matter what. “The home insurance market here is a shifting environment,” he said. “But if your sailboat has a deep keel, you can make it through.” Tashmoo Insurance Agency has been operating on the Island for over 30 years, so they’ve seen their fair share of changes in the market.
But Gervais said the insurance marketplace is aware that the Island is due for a big hurricane, which is helping to scare off some providers. The last hurricane to directly hit the Island was Hurricane Bob in 1991, and with natural disasters increasing due to climate change — along with their intensity — emergency workers and experts across the Island are preparing for the inevitability of another storm.
“You won’t find any name-brand insurance doing business near the coast,” Gervais said. “They like the environment where they can predict what’s going to happen … the industry is afraid of a large storm.”
The Massachusetts Property Insurance Underwriting Association (MPIUA) is a common plan for homeowners on the Island to turn to. Also known as the FAIR (Fair Access to Insurance Requirements) Plan, which is built on state legislation, it’s considered stable. But coverage is capped at $1 million, and considerations for raising that cap have not been successful. Since the rebuild property value of many homes on the Island exceeds $1 million, this leaves some Vineyarders at a loss.
“You’ll find this same situation all up and down the Eastern Seaboard — it’s the coastal situation that makes it more difficult for insurance companies,” Gervais said.
It’s not just coastal flooding that could be having an impact on the cost of insurance and providers leaving the area.
Richard Soo Hoo, chief operating officer of Sterling Insurance Group, described a trickle-down effect of firefighters up-Island being mostly volunteers, and a lack of hydrants. He said that signals to insurance companies that the Island doesn’t have the resources to stop a house fire quickly, whether warranted or not.
“Up-Island is considered a high fire risk from an insurance standpoint,” the local agent said. Fire risk is a huge insurance issue, especially after the fires across California and in Maui. Just like the natural disasters and storms, any high-insurance-payout event results in higher premiums in areas where the same disaster could occur. Since up-Island areas are at higher fire risk, the cost increases as a result.
“I don’t put any blame on the fire departments for insurance rates going up,” Soo Hoo said. “The firefighters are great … [But] if the towns were able to provide more funding in order to create some year-round positions, it could help improve the insurance rating.”
He also said an increase in fire-hydrants and water accessibility could help the ratings up-Island.
Although he’s been in the industry for about 20 years, Soo Hoo and his wife started Sterling Insurance of Martha’s Vineyard in 2016, making his group one of the newest on the Island.
He brought a number of insurance companies to the Island when he moved his company here, which bolstered the insurance market for a time. Each insurance company has been responsible for certain deals and agreements with larger syndicates that have made policies possible on the Island.
“Insurance companies are inspecting a lot more diligently right now, and a lot of them are looking for reasons to not write business, which is unfortunate, but it’s their choice as a company. We just try to help advise our clients as best we can,” Soo Hoo said.
Soo Hoo, like agents at Mone, said that the market is the worst he has seen in his 20 to 30 years.
“We thought we’d see flexibility last January, then two hurricanes happened,” O’Connor said. “That sealed the deal for the next couple of years, at least. The best-case scenario is being renewed at this point.”
The ebbs and flows of the industry are proving less sustainable as the years pass, leaving local agents to communicate with clients about rising costs. The result is often a sense of discontent with local small insurance businesses, while the larger companies are able to function however they see fit.
“People get upset, and obviously don’t like us very much right now, but we can only sell what we are offered from the carriers,” O’Connor said. Often agents are the bearer of bad news for local homeowners when larger companies decide to pull coverage or hike their prices. Agents on the Island work directly with insurance companies to find coverage that works for each individual or family, and are left to scramble for options when multiple big names decide to leave.
O’Connor sympathized with homeowners who are struggling to stay insured right now. “We take it very seriously, and even personally, when we see these increases, because we know it is hurting our clients. If there was anything else we could do, we certainly would.”
