New York in Insurers' Hurricane Zone

The letter to Marie Collins began: "We're writing to you with what we know is unfortunate news about your Allstate Insurance."

It was a cancellation. Her home was being dropped, the letter said, because it is in the path of future hurricanes.

Collins doesn't live in New Orleans or Florida. She lives in New York.

Hurricane Katrina hit the Gulf Coast last year, but its impact is being felt hundreds of miles away, as insurers try to reduce their exposure to future catastrophes.

"It's outrageous," said Collins, who's lived 81 of her 83 years in the same house in Brooklyn, where a devastating hurricane hasn't hit since 1938.

Yet hers is one of 30,000 homes the nation's No. 2 insurer, Allstate Corp., is canceling in coastal counties of New York, citing the need to protect itself from future storms.

Nationwide Mutual Insurance Co. is no longer writing new policies on the eastern half of Long Island, N.Y., while MetLife Inc. is requiring extra inspections and expensive storm shutters for new customers living within 5 miles of salt water.

After Hurricane Andrew in 1992, insurers drastically scaled back in Florida, forcing residents into the expensive, state-run insurance pool. The difference is that now insurers are not just shedding policies in traditional hurricane targets such as Florida, but all along the Eastern Seaboard.

"My home is in the middle of Cape Cod. It's nowhere near the beach. But we're all being painted with the same brush," said Paul Covell, 67, who recently received a cancellation letter from the Hingham Mutual Group, a Massachusetts-based insurer that dropped 5,000 of its customers on the Cape.

Even though the Northeast has not had a direct hit in decades, the high replacement value of homes there makes it an especially vulnerable spot in an insurer's portfolio.

"Homes in Long Island have gone up in the last five years between 60 and 70 percent. Believe me, our rates have not gone up by 60 or 70 percent," said Edward M. Liddy, chairman and chief executive of Northbrook-Ill.-based Allstate. "You look at our exposure and you say 'We want to have enough capital to protect and care for all our 17 million households across the country.' To do that, you may have to reduce your exposure in a small way in other areas."

Those in the industry stress that a single disaster like Hurricane Katrina can wipe out years of savings, putting an entire company at risk.