Martha’s Vineyard has one of the highest rates of home insurance policies not being renewed across the United States, leading to higher premiums, according to a newly released federal report. 

Data collected in a December U.S. Senate report showed Dukes County had the third highest rate of non-renewal in the country, trailing only Glades County, Florida and Dare County, North Carolina. Island insurance officials said the report’s findings are not a surprise, but highlight the current turbulent state of insurance on the Vineyard. 

“The entire East Coast has had companies retreating from covering it for the last 25 years,” said Joe Gervais, the founder of Tashmoo Insurance. “We’ve seen non-renewals causing us to find new companies for lots of people, and the companies come and go.” 

The report, which warns of the potential for a recession similar to 2008, points to climate change as a driving factor in the insurance market’s struggles. 

“What our new data reveal is that the failure to deal with climate change is also affecting whether families can even get homeowners insurance, which threatens their ability to get a mortgage, which spells trouble for property values in climate-exposed communities across the country,” U.S. Sen. Sheldon Whitehouse, a Democrat from Rhode Island, said in a statement. 

In 2023, Dukes County had a 11.6 per cent non-renewal rate, meaning about one in 10 homeowners did not have their policies renewed. Glades County, Florida had a rate of 16.2 per cent, and Dare County, North Carolina had 12.9 per cent. 

Nantucket County was ranked at number 10, with a 7.3 per cent rate, and Barnstable County, which encompasses all of Cape Cod, came in at number 20, with a rate of 6.3 per cent. 

The national home insurance market has retreated from areas ravaged by wildfires and storms, and the Island insurance agents have said that in recent years, that has also affected companies’ willingness to take on insurance in the Vineyard and other coastal areas. 

A rotating cast of businesses are still willing to cover the Vineyard, but fewer players means higher costs. In many cases, home insurance premiums have gone up by 20 per cent or more.

“We can do it but every Vineyarder is paying more to insure their building than five years ago,” said Mr. Gervais.

Paula O’Connor, the executive vice president and business manager at Mone Insurance in Vineyard Haven, has seen premiums on older homes double in recent years.  

“[It’s] going up an unfathomable amount of money,” she said. 

In an attempt to get at least some insurance, many customers have asked to insure their homes for under their current value, but Ms. O’Connor said agents can’t do that.

Richard Soo Hoo, the chief operating officer of Sterling Insurance in Vineyard Haven, said climate change is a factor in the insurance industry, but he also pointed to several other economic drivers that he thought were also playing a large role in higher costs. 

While there has been an increase in the frequency of major weather events nationally, disruptions in the supply chain during the Covid-19 pandemic also pushed up the cost of construction, potentially leading to homes being underinsured. 

“From a risk management standpoint, carriers usually do not want to be the only option in the market,” Mr. Soo Hoo said. “They prefer when the risk is spread out so that the losses that are expected in a certain area or market are spread out as well. What we’ve been seeing locally is almost a domino effect, when carriers start to notice other carriers leaving the market, they want to leave as well.”

Dukes County has the second highest change in non-renewal rates between 2018 and 2023, according to the senate report. In that five year span, the rate rose from .43 per cent to 11.6 per cent.

Lloyd’s of London is now the big carrier for the area, and others such as Narragansett Bay Insurance and Openly have pulled back. The up-Island towns and Chappaquiddick are especially vulnerable due to the lack of town water. 

Part of the issue is the high value of the Island’s homes, in addition to their proximity to the water. Many Vineyard homes cannot use the state-sponsored home insurance, known as the Fair Plan, because it does not cover homes worth more than $1 million. The median home price on the Vineyard in 2022 was $1.4 million.

Both Mr. Soo Hoo and Mr. Gervais said that despite the state of the market, prices may be leveling off. Mr. Gervais met with a wholesaler in October and it was the first time in four years that they did not ask to raise rates. 

Mr. Soo Hoo said that the market is often cyclical.

“While we’re in a very bad, maybe the worst, state ever for consumers, I am starting to see companies showing signs of hitting the bottom,” he said “And [I] am hopeful that in the next year or two pricing increases will level off, carriers will re-enter the market, and potentially even cause rates to lower.”