A U.S. Senate advisory committee has released a bleak report warning of a national recession similar to the 2008 housing crash, which could be spurred by climate change — stronger storms and wildfires — because of its impact on the homeowners insurance market, and Martha’s Vineyard is listed at the top of the report’s findings.
With data obtained through insurance providers, the Senate Budget Committee finds that companies are abandoning areas more and more frequently across the country, which is making it difficult to obtain a mortgage. Without mortgages, housing prices could plummet, the committee warns.
Bankers and insurance agents on Martha’s Vineyard say that while insurance costs have soared in recent years, and getting coverage is more difficult, they haven’t reached panic mode yet — buyers are still able to obtain mortgages locally.
The committee report, which was released in December, and first reported by the New York Times, details the rate at which insurance companies are not renewing homeowners insurance coverage, essentially highlighting where many providers have given up trying to make a profit or are too worried about future damage.
In the thick of the report is Martha’s Vineyard, or Dukes County, which had one of the highest nonrenewal rates in the country in 2023.
Dukes County is listed as having a nonrenewal rate of 11.6 percent, which means that more than one in every 10 homeowners insurance policies were not renewed in 2023. The local county is third only to Glades County in Florida and Dare County in North Carolina — both no strangers to damaging hurricanes.
Equally unnerving for the Island, and detailed in the Senate report, is the increase in the rate of nonrenewals over the six years of the study. In 2018, just 0.43 percent of insurance policies were not renewed in Dukes County, compared with 11.6 percent in 2023. Dukes had the second highest rate of increase in the country for smaller communities.
Nantucket and Barnstable counties, not surprisingly, are also in the mix alongside the Vineyard.
The findings come with news reported recently that major insurance providers — including Plymouth Rock, Narragansett Bay Insurance, Openly, and Swift — have pulled coverage plans from the Island, some entirely, and some just within the past year. And local agents have reported that insurance costs have increased as much as 30 percent on the Island.
The Senate findings, in a way, solidify for local insurers what has been known for some time, that climate change is real, and has become a financial hardship not just in coastal communities, but across the country as the insurance market looks to recoup costs from the damaging storms and wildfires.
“This is the worst I’ve seen [the market], and I don’t see any relief coming, because I don’t think climate change is going to get better anytime soon,” said Bob Mone, who founded Mone Insurance in Vineyard Haven in 1996. “We have Gov. DeSantis in Florida who says climate change isn’t a problem, but Miami is almost under water.”
Mone said that while the Senate report might list the Vineyard high on its list of impacted communities, the problem really is countrywide. And he said that while it might be more difficult and more expensive to get coverage on the Island, there are still companies that are willing to insure homes. The darkest predictions of the Senate report that housing prices will plummet because no one can get insurance haven’t come true on the Island, he said.
James Anthony, president and CEO at Martha’s Vineyard Savings Bank, echoed Mone’s comments. He isn’t panicking yet, noting that there are still insurance providers that are offering policies, albeit more costly than previous years — in some instances, as much as a mortgage. Anthony said that he has not seen residents failing to obtain a mortgage because they can’t find an insurance plan.
But for the Vineyard bank CEO, he sees the insurance issue as yet another expense for homeowners living on Martha’s Vineyard who are already struggling with high housing costs, and a high cost of living, all while experiencing a lack of services, with businesses moving off-Island.
“It all adds to the destabilization of the Island,” he said. “That’s what it feels like is happening. It feels unmanageable for many people. Homeowners insurance is another struggle. It all piles up, and it’s straining the fabric of our community.”
“We’re not at a crisis point at this point, but it’s trending in the wrong direction,” Anthony added.
The Senate committee, chaired by Rhode Island Senator Sheldon Whitehouse, demanded nonrenewal information from 41 major insurance providers to get a better understanding of the insurance market. Twenty-three companies responded.
As for recommendations, the report focused on the need to cut down on carbon emissions and to invest in climate resilience to stabilize the market. But the predictions are dire.
“This is predicted to cascade into plunging property values in communities where insurance becomes impossible to find, or prohibitively expensive — a collapse in property values with the potential to trigger a full-scale financial crisis similar to what occurred in 2008,” the report states. “To avoid such a devastating fate, we must speed the transition to clean energy and eliminate carbon pollution. Climate change is no longer just an environmental problem. It is a looming economic threat.”
If your insurance wasn’t renewed recently, or if you are struggling to afford coverage, send us an email at editor@mvtimes.com or sam.houghton@mvtimes.com.
