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February 21, 2025

Open the Floodgates: Understanding Insurance Trends in the Northeast

As homeowners in the Northeast battle the dual threats of natural disasters and rising insurance costs, they can implement proactive measures to safeguard their homes and minimize risks.

Summary

The Northeast region faces significant risks from climate change and extreme weather events, including hurricanes, flooding, winter storms, and wildfires, which have resulted in billions of dollars in damages over recent years.
Homeowners in the Northeast are experiencing rising insurance rates, averaging a 20% increase over the past five years, prompting insurance companies and state regulators to implement measures to help manage these costs.
Legislative efforts are underway to address escalating insurance premiums and protect homeowners from sudden nonrenewals, ensuring greater stability and fairness in insurance coverage.
Proactive measures are essential for individuals and communities to mitigate risks, including reviewing insurance policies, developing emergency plans, investing in resiliency measures, and enhancing cybersecurity strategies to protect against increased cyberattacks following natural disasters.

Known for its beautiful mountain-to-shore landscapes, bustling cities, original founding colonies, and historical symbols like the Statue of Liberty, Plymouth Rock, and the Liberty Bell, the Northeast is a thriving place to live. New York, Pennsylvania, and New Jersey continue to be among the most populated states in our country. While the Northeast region, also encompassing Connecticut, Massachusetts, Rhode Island, New Hampshire, Vermont, and Maine, provides diverse cultural activities and employment opportunities, living there does come with significant risks. The Northeast is not immune to the devastating impacts of climate change and extreme weather events, which are often followed by an increase in cyberattacks.

Let’s explore these risks, their impact on insurance rates and legislative trends, and the measures you can take to prepare for them.

Natural disasters wreak havoc

Over the past five years, the Northeast has experienced 143 severe weather events, resulting in an estimated $59 billion in property, infrastructure, and other damages. Weather events impacting the Northeast include the following:

Hurricanes and severe storms

The Northeast is vulnerable to hurricanes, particularly during the Atlantic hurricane season from June to November. While the region may not experience hurricanes as frequently or as powerfully as the Southeast, the impacts can be severe, often causing tornadoes, flooding, and other conditions.

Day after the torrential rains from the remnants of Hurricane Ida - photo via Emma Lee/WHYY

Most recently, in August 2024, extreme rainfall events related to the remnants of Hurricane Debby caused severe and flash flooding in parts of Pennsylvania, New Jersey, and Vermont. This interaction also produced a tornado that impacted Buffalo, New York.
In 2021, remnants of Hurricane Henri, followed by Hurricane Ida, caused catastrophic flash flooding from eastern Pennsylvania to New York. Flash flood emergencies were declared in New Jersey and New York, causing widespread damage to homes, businesses, vehicles, and infrastructure.
In June 2021, a severe rainstorm brought 4 inches of rain in three hours, generating extreme runoff flows that damaged 10 miles of historic carriage roads and trails in Acadia National Park, Maine.

Client Advocacy in Action: Hurricane Reconciliation

A client from New England asked our team to review a hurricane claim that they felt was not properly resolved with their previous insurance carrier.
The claim was well documented, but the coverages and payments were still being missed by the adjuster. The client had been trying to settle their loss for almost six years, to no avail.
Our claims advocacy team conducted a thorough review of the claim and all the supporting documents, identifying specific items and areas for improvement.
This effort resulted in over $2 million in additional payments for covered damages to our client.

Flooding

The Northeast has seen a roughly 60% increase in the number of days with extreme precipitation, the largest increase of all U.S. regions. The intensity of these events has also increased. This trend, along with an increased risk of flooding, is expected to continue. An additional study predicts that extreme precipitation in the Northeast will increase by 52% by 2099. Recent flooding events in the Northeast are detailed below.

In August 2024, a slow-moving front accompanied by training storms brought extreme amounts of rain to parts of the Northeast, which led to catastrophic flooding. The worst of the flooding occurred in southwestern Connecticut and Long Island, New York, where more than 10 inches of rain fell in a 24-hour period.
In July 2023, catastrophic flash flooding and river flooding occurred across much of Vermont, causing washouts of numerous roads and bridges, and mudslides that resulted in significant property losses.

Winter Storms

With its blizzards, ice storms, and extreme cold, the Northeast can have harsh winters, which can cause damage to properties and businesses. The region usually averages 20 to 30 winter storms annually, which often result in significant economic impacts, including Winter Storm Loraine. In February 2024, Loraine dumped up to 15 inches of snow in Connecticut, Pennsylvania, New York, and Massachusetts, causing significant damage and power outages. The winter seasons of the past few years have also brought Arctic cold blasts resulting in record-low temperatures:

Maine, New Hampshire, and Vermont have all recorded 50 degrees below zero as the coldest temperature. New York has the coldest record in the region at 52 degrees below zero.
In February 2023, the summit of Mount Washington in New Hampshire observed a wind chill temperature of -108 degrees Fahrenheit. This was one of the coldest wind chill temperatures ever recorded in the U.S.

Wildfires

Even though there have been studies showing increased precipitation, the Northeast has also experienced prolonged droughts not seen for some 20 years, in August, September, and October of last year. This drought has led to increased wildfire activity in the Northeast.

New Jersey’s state fire service reported on November 13, 2024, that it had responded to 537 wildfires since early October, up approximately 1,300% over the same period last year. The state had responded to about 1,300 wildfires in 2024, with acreage burned almost tripling compared to 2023, impacting 11,000 acres.
Massachusetts experienced 15 wildfires in October 2023, with 212 in October 2024.
Connecticut experienced over 200 fires in the fall of 2024, most burning between one and five acres.
One of the largest fires was the Jennings Creek fire, which burned at least 7,000 acres along the New York and New Jersey state borders in the fall of 2024.

Cybersecurity attacks increase with severe weather events

Unfortunately, the likelihood of cyberattacks significantly increases after a natural disaster. Cybercriminals often deploy phishing schemes, ransomware, spoof emails, and other malicious tactics to target critical state and local infrastructure, municipalities, medical facilities, and first responder/emergency services, which can weaken their cybersecurity defenses during vulnerable times.

Furthermore, the Northeast’s large population and high concentration of businesses, including the top financial, banking, and insurance industries, make it a prime target for cybercriminals. New York and Pennsylvania are among the top 10 states with the highest number of cyberattack complaints, while both, along with New Jersey, are among three of the top 10 states with the most dollar amount losses related to cyberattacks.

Rhode Island benefits system hacked

In December 2024, the Rhode Island system for health and benefits was hacked by cybercriminals.
The cybercriminals held the personal information of hundreds of thousands of Rhode Islanders hostage while asking for ransom to be paid.
When their ransom demands were not met, they released the stolen information online, which included names, addresses, dates of birth, Social Security numbers, and certain banking information.
An estimated 709,000 people were impacted by this cyberattack.
It's always important to stay mindful of potential fraud given the increase in cyberattacks. Review our tips to stay as safe as possible online.

Driving insurance rates north, too

As the Northeast deals with the aftermath of natural disasters, homeowners are facing a troubling trend: rising insurance rates. According to a recent report, homeowners' insurance rates in the Northeast have risen by an average of 20% over the past five years. Insurance companies and state regulators are now taking proactive measures to help residents manage these rising costs.

Insurance companies attempt to lessen the blow

Insurance companies providing coverage in the Northeast have implemented some initiatives to minimize rate increases for homeowners:

Improve risk assessment models: Insurance companies are investing in advanced data analytics and technology to enhance their risk assessment models. By utilizing geographic information systems (GIS) and predictive modeling, insurers can better understand the specific risks associated with different regions. This allows for more accurate pricing and can help mitigate drastic rate increases.
Offer discounts for resiliency measures: Many insurers are offering discounts to policyholders who take proactive steps to enhance their property’s resilience against natural disasters. This includes installing storm shutters, elevating homes in flood-prone areas, and retrofitting structures to withstand severe weather. By incentivizing these improvements, insurers not only help residents save on premiums but also reduce overall risk.
Introduce flexible payment options: To ease the financial burden on policyholders, some insurers are introducing flexible payment plans that allow for monthly or quarterly payments instead of annual lump sums.

State legislative actions heating up

In the Northeast, state legislators in most states are actively working on several initiatives aimed at addressing the rising costs of homeowners' insurance premiums. Here are some key legislative efforts:

In Pennsylvania, the Shapiro Administration recently blocked over $180 million in annual property and casualty insurance premium increases that were set to be implemented in 2024. This move aims to provide immediate relief to homeowners facing escalating insurance costs.

In New York, Senate Bill 2023-S8481 has been introduced to prohibit increases in homeowners' insurance rates that exceed 25% per year, unless such increases are explicitly agreed upon in the insurance policy. This measure aims to provide more stability and predictability for homeowners regarding their insurance costs. Senate Bill 2023-S8167 directs the Department of Financial Services to conduct a comprehensive study on the increasing costs of insurance premiums. This study will examine the lack of availability of insurance coverage for flood-related losses and explore the potential for supporting a private flood insurance market in New York.

In New Jersey, recent reports indicate a concerning trend of nonrenewals in certain counties, such as Cape May, Hudson, and Atlantic. Legislators are considering measures to protect homeowners from sudden nonrenewals and to ensure that insurance companies provide clear reasons for nonrenewal decisions.

Preparing for the future through broad proactive measures

As the risks of natural disasters continue to rise in the Northeast, it is important for individuals, businesses, and state and local governments to take proactive measures to protect their homes, businesses, communities, and data. According to a recent study, every dollar spent on mitigation saves $13 in recovery costs.

Hurricane Sandy aftermath in New Jersey - photo via AccuWeather, AP Photo/Julio Cortez

Here are some resiliency measures to consider:

Homeowners should review their insurance policies to ensure adequate coverage for natural disasters, including flood insurance, which is often not included in standard policies.

Convective storms: Consider installing storm shutters and a whole-house surge protector at each electrical panel.
Flood: If your home is in an active flood-prone area, consider lifting your home. Otherwise, using passive or active floodproofing measures can help protect your property.
Nor’easter: Secure or bring in outdoor objects, like patio furniture or grills, and take similar steps as you would with convective storms, flooding, and wind.
Wildfire: Wildfires are on the rise in the Northeast region, and routine home maintenance is important: roof inspections, utilizing gutter guards, and keeping loose debris (like leaves) out from under your deck are important factors in protecting your property from wildfires.
Wind: Impact-rated garage doors, windows, and doors are recommended as they are created to sustain impacts from debris at high speeds. This is especially important if your home is within five miles of the coastline. If your home is in an area prone to hurricanes, heavy convective storms, or nor’easters, consider asking for a wind mitigation inspection of your home.
Winter storm: Having a backup generator and installing a low-temperature monitoring system are important considerations for keeping your home at a comfortable temperature during a winter storm.

Families should develop and regularly update emergency plans that include evacuation routes, communication strategies, and emergency supply kits.

State and local governments should engage communities in disaster preparedness initiatives, including training programs and public awareness campaigns, as well as investing in resilient infrastructure measures, such as improved drainage systems and flood barriers, to mitigate the impacts of flooding and storm surges.

Legislators should prioritize strategies and policies that address the specific risks faced by their homeowners and communities, including continuing to work closely with insurance providers to minimize rate increases and offer discounts for resiliency measures.

Businesses, state and local municipalities, and homeowners should strengthen their cybersecurity strategies, enhance firewalls, and update their privacy software programs to protect their data.

Engage with an expert risk and insurance advisor

An expert risk and insurance advisor can help assess your property risks, inform you of state regulations and other initiatives, and determine what home resiliency measures you can take to mitigate your risks. They can also help evaluate your risk of cyberattacks and provide guidance on strategies to help reduce your risk.

Schedule an insurance review with a personal risk advisor to learn more about the liability exposures related to Northeastern states and ensure you have adequate insurance protection.

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