EDITORIAL: Two insurance reforms could help LI

Residents of coastal areas like Long Island may be able to breathe a bit easier if state officials succeed in their bid to reduce the volatility in the cost and availability of homeowners insurance.

Too many homeowners who live near the coasts have paid premiums reliably for years, only to have carriers abruptly refuse to renew their policies. Others have been hit with daunting out-of-pocket costs when windstorms slam homes and down trees. The problem is insurers' fear of the big one; a hurricane that results in billions of dollars in claims.

Right now companies can drop up to 4 percent of their policyholders statewide each year, without state approval. And there's nothing to prevent concentrating the nonrenewals in one vulnerable area. The state Insurance Department wants to limit nonrenewals to 2 percent of policyholders in any one county, or 50 policies, whichever is greater. The agency also wants to standardize windstorm deductibles - which can run up to 5 percent of home value - and limit them to hurricanes. But lower deductibles would likely mean higher premiums. Individual homeowners should be able to choose their poison when buying a policy.

A third proposal would need legislative approval. It would create a catastrophic pool to help cover damages from the big one, and mitigate premium hikes. A portion of homeowners' premiums are for catastrophic coverage. The pool would aggregate that money for when it's needed. Details matter but, in concept, this is a promising framework for storm relief. hN