N.Y.: We’ve come so far … standardized windstorm deductible definition

For several years, PIANY has been on the front lines as an advocate for the standardization of the windstorm deductible definition in New York state.

It has been a top legislative priority for the association. PIANY members and staff members have meet with countless legislators, their staff members, and representatives of the New York State Department of Financial Services to educate those in the insurance industry about why a standardized definition of windstorm is important (right now there are over 100 definitions filed with the DFS); and why it would be helpful (those in the insurance-buying community deserve to be treated equally when they need to address a windstorm-related loss).

The hard work

Current PIANY President Gary Slavin wrote an elegant letter to the editor, to explain to consumers why this issue is so important:

In New York state, homeowners insurance policies have one definition for fire, and one definition for vandalism, etc. However, while the National Weather Service has a clear definition of a hurricane, the insurance industry uses over 100 definitions to determine when a policy’s windstorm deductible applies. Which definition your policy uses will depend on your insurance company. If the windstorm wind speed doesn’t meet the definition of windstorm outlined in the policy, you will be covered after you pay your standard deductible. However, if the storm meets the definition—due to the speed of the storm—your deductible is 5% of Coverage A Dwelling limit. This could be tens of thousands of dollars. For example: If your home is valued at $500,000, your 5% windstorm deductible is $25,000.

Here’s the problem: If your neighbors have policies with different insurance companies, they may only have to pay their standard deductible.

During the last legislative session, legislation (S.4199) to standardize the definition of windstorm for homeowners insurance policies passed both houses in the state Legislature!

The opposition

Now, not everyone in the insurance industry may be as excited about this news as I am. Insurance carriers may be reluctant to have one definition because multiple definitions allow them to mitigate their losses—clients with homes on the coast vs. clients with homes that are more inland.

Plus, I’ve heard some insurance carriers argue that a single definition will affect their reinsurance policies because reinsurers require a specific definition, but all these carriers write insurance in other states that have a single definition of windstorm, and it isn’t an issue in those states.

The next steps

Thank you to everyone who took the time to participate in PIANY’s grassroots campaigns to help educate legislators on this important bill, and advocate for its passage. We couldn’t have gotten this far without the support of those in the American independent agency system.

However, we need one final push. We need to get the bill on Gov. Kathy Hochul’s desk, and we need her to sign it into law.

I encourage you to contact Gov. Kathy Hochul’s office today, and ask her to call for and sign the S.4199 into law. In fact, ask everyone in your agency to contact the governor, and let her know why this issue is important.

We’ve come so far … but we still have a way to go.