“You can’t see the ocean from anywhere in this house.”
But as Shanks, who asked that her town not be named, and other Massachusetts property owners are learning, insurers are becoming increasingly risk averse. Experts say that features that were once considered acceptable are now sometimes triggering price increases or even nonrenewals from insurers. A property that is less than two miles from the water may be rejected, for example, or an older home — built many decades ago — that may have outdated systems or hard-to-replace materials. Or, heaven forbid, its owner has committed the sin of all sins and filed claims in the past five years.
By this point in the tightening insurance market, the causes are well known. Climate change is fueling more intense and damaging storms. Inflation is driving up the price of rebuilding. And the reinsurance firms — the companies that cover the insurers — have raised rates, sometimes by as much as 50 percent, and some of those costs are passed onto the little guy.
Wait? Isn’t this supposed to be a California or a Florida problem? Yes, but now the storm is making landfall here, too. Not only has insurance already gotten pricier and in some cases harder to secure, but the growth in extreme wind and precipitation events in Massachusetts will probably drive insurers to hike rates further or to refuse coverage in some cases, said Jeremy Porter, the head of climate implications research at the First Street Foundation, a Brooklyn-based research and technology nonprofit .
Rising insurance costs can be a double whammy, he added, making a property both costlier to insure and also driving down its value. He gave an example from Miami, where a case study found that properties rezoned into a flood zone lost 4 percent of their value.
“Ultimately,” he said, “buyers are less likely to buy properties once made aware of the risk, and sellers are more likely to make concessions on sale prices.”
In Massachusetts, home insurance rates increased by an average of 15 percent from May 2022 to May 2023. That’s on top of an 11 percent average increase the year before, according to an analysis by Policygenius, an online insurance marketplace — or more than 25 percent in a two-year period. And some homeowners have been hit with even bigger jumps.
In the condo market, where associations need “master policies” that provide property and liability coverage for the entire property, some policies are doubling or even tripling in price, or not being renewed at all.
“Accounts we could place with a phone call a few years ago we can’t even get coverage for today,” said a longtime insurance broker, whose boss insisted he not be identified due to “troubling times” in the insurance market.
The broker, who spoke to a Globe reporter recently, after meeting with attorneys at the Braintree-based real estate law firm of Marcus, Errico, Emmer & Brooks, P.C., launched into a 39-minute monologue on the distressing situation. His description of what he and his clients are up against was filled with dark references to “major sprinkler line claims” due to the cold snap in February; insurance companies that now demand engineering studies (in the wake of the 2021 Surfsidecondo collapse in Florida); “tightening underwriting guidelines”; and buildings that have been sent from the standard insurance market into the pricier and less desirable “surplus lines market,” which is for risky or undesirable properties.
“This is what keeps me up nights,” he concluded.
Mark Einhorn, one of the attorneys at the Braintree firm, said he has seen cases where the premium for the master policy went from $50,000 to $150,000 in a single year. And, of course, payments toward the master policy are in addition to the costs of any insurance each individual condo owner buys to cover personal property, their own liability, and the master insurance deductible. These policies are also rising in price — by up to about 15 percent, according to one expert’s estimate.
In May, the largest homeowner insurer in California announced it would stop selling coverage in the state, setting off scary headlines like, “Climate Shocks Are Making Parts of America Uninsurable. It Just Got Worse.”
The Globe recently reported that a dramatic exodus of insurance companies is unlikely in New England, but even so, with climate-driven storms rising in the state, Christopher Stark, executive director of the Mass. Insurance Federation, a trade association, said that his members are concerned about increased costs from climate change and inflation.
“While the number of storms in any given year fluctuates (and storms are the major driver of claims), in 2021 there was an estimated $368.5 million in losses compared to the 2016 estimate of $159.4 million,” he emailed the Globe.
As insurance gets pricier or harder to procure, tension is mounting. In Pembroke Pines, Fla., owners in a 55+ community were so upset about skyrocketing insurance premiums that chaos broke out at an August meeting, and the police had to be called.
“One security guy … grabbed this little old man and picked him up and threw him out into the street,” a resident told NBC6, the local TV news station, “like he was a ragdoll.”
On the North Shore, a few months after Shanks learned she was being dumped by her insurer, her broker finally found an insurer willing to take on the risk — for $3,000 more per year than she had been paying.
“Everything is becoming more expensive,” said Shanks, an author and entrepreneur.
She’s worried about what the increased insurance challenge means for her own future in the house, and also its resale value.
“It’s very stressful,” she said, speaking for every property owner, everywhere.
And we haven’t even talked about flood insurance yet.