Vineyard homeowners who already pay some of the highest home insurance costs in the country will not see their rates go up this year.
After the state insurance commissioner last month rejected a proposed 25 per cent rate hike for the FAIR Plan, the state-backed insurance provider of last resort, some speculated officials for the plan would appeal the ruling.
But at a meeting last Thursday, the insurer’s board of directors decided not to appeal the ruling, at least for now.
“This is definitely good news, and we haven’t had a lot of that over the past year,” said Paula Aschettino, a Cape Cod resident who has led a grass roots campaign for home insurance reform. “I think homeowners on Martha’s Vineyard and [Cape Cod] are already having a tough enough time paying their bills. It is good to hear they won’t be seeing a hike in their insurance [bills].”
The FAIR Plan was created by the state legislature in 1968 to provide insurance for people unable to obtain coverage on the private market.
Starting in 2004, private insurers began pulling out of the Cape and Islands or dramatically increasing their rates, citing fears that a hurricane could strike the area and cause devastating losses. As a result, nearly all Island residents have been forced into the plan.
In February, the Massachusetts Supreme Judicial Court upheld the FAIR Plan’s 2005 rate increases, which included an annual increase of as much as 25 per cent for cities and towns across Cape Cod and southeastern Massachusetts as well as all of the Vineyard. The new rate increase was denied by insurance commissioner Nonnie Burnes on May 8 on the grounds that plan officials failed to demonstrate a need for the proposed rate hike.
Cape and Islands Rep. Eric T. Turkington is working on several insurance industry reform bills. One would require FAIR Plan agents to provide a detailed statement policy holders can understand, another would limit future increases on wind deductibles and a third would establish a uniform methodology for predicting major weather events.