The Insurance Crisis on Martha’s Vineyard
Faced with crippling home insurance costs, residents of Martha’s Vineyard are grappling with difficult choices. The rising cost of protecting their homes against climate-related risks is forcing many to make severe financial cutbacks, and some are even considering leaving the island they call home.
Chappaquiddick resident Bob Fynbo reads his insurance policy, which is now more expensive than his mortgage.
For Chappaquiddick resident Bob Fynbo, the situation is dire. After spending $70,000 to replace his roof, a project he undertook at his insurer’s insistence, he was shocked by his renewal quote. “When they came back with the quote of $11,900, it was like a gut punch,” Fynbo said. This represented a staggering 360% increase, making his insurance more expensive than his mortgage. At 65 years old, Fynbo, who operates a wifi tower, is now considering difficult actions.
When he bought his home 40 years ago, Fynbo said annual insurance costs were approximately $350. According to Fynbo, the best possible policy he could secure was a bare-bones plan costing almost $6,000 per year, doubling his previous premium.
Island Residents Struggle
Fynbo is not alone. A survey conducted by the Martha’s Vineyard Times revealed that islanders are delaying retirement, postponing medical procedures, and cutting back on social activities to cope with these increasing costs. Many are also worried about the possibility of being dropped by their insurance companies altogether.
The nonrenewal rate on Martha’s Vineyard has surged, from less than half a percent in 2018 to nearly 12% in 2023. A report from a U.S. Senate advisory committee indicated that Martha’s Vineyard has seen the third-highest rate of dropped homeowners’ insurance policies nationwide.
As climate change makes storms more frequent and intense, the area is increasingly threatened.
Edgartown resident Deb Mello Orazem, who taught in island schools for 27 years, was informed in September of her policy being dropped by her provider. She was quoted $9,000 annually for coverage from a different company. Orazem has turned to the Mass Fair Plan, a state-mandated insurance program, due to the unaffordability of the private market. The program provides coverage to approximately 200,000 Massachusetts policyholders, with about 102,000 residing in Barnstable, Dukes, or Nantucket counties. While Orazem considers herself fortunate to have this option, she acknowledges that it’s “definitely not ideal.”
Limited Options and High Costs
The Mass Fair Plan serves as a “market of last resort.” However, it comes with potential drawbacks. Policies may offer less coverage than is needed. For instance, coverage is capped at $1 million in replacement costs, possibly not enough to rebuild a home on Martha’s Vineyard, where even a modest home can cost more.
Some people are choosing to go without coverage for named storms because of high policy costs. Chilmark resident Peter McGhee made this decision when his policy jumped 50% in one year to $6,000. Without named storm coverage, his annual policy is now about $1,500. McGhee, who no longer needs a mortgage and whose home is set back from the ocean, is aware of potential risks associated with omitting that coverage. He stated, “I know there are some risks in not having it… the increment of cost didn’t seem to be warranted by the probability of damage.”
Because of the cost of home insurance, Fynbo is considering a move off-island.
For Bob Fynbo, the future remains uncertain. Facing the impending renewal of his policy in April, he is grappling with the question of whether he can afford insurance or whether he will need to leave the community he’s known for six decades. “I’m coming up on an untenable choice… I don’t see where this comes out good for me. I only see where it just keeps whittling me down… and that’s heartbreaking,” said Fynbo.
