Why Your Martha's Vineyard Insurance Rates Are Rising (It's Not Just Climate)

Sterling Insurance Group's Chief Operating Officer Rich Soo Hoo was recently featured on MVY Radio's "The Vineyard Current" program, where he discussed the complex factors driving rising homeowners insurance rates on Martha's Vineyard. In his conversation with host Ray, Soo Hoo addressed a common misconception: contrary to popular belief, climate change is not the primary reason for skyrocketing insurance costs on the Island.

The 18-minute interview, which aired in early January 2026, provided valuable insights for Martha's Vineyard homeowners struggling to understand why their insurance premiums have increased dramatically over the past several years.

Listen to the full interview: https://on.soundcloud.com/Bl1zRW9Vb13dneZZZY

THE COMMON MISCONCEPTION

It's Not (Mostly) Climate Change

While media coverage frequently attributes rising coastal insurance rates to climate change and storm risk, the reality on Martha's Vineyard is more nuanced. During the MVY Radio interview, Rich Soo Hoo explained that climate change is indeed one factor affecting insurance markets, but several other economic and structural forces are playing equally—if not more—significant roles in driving premium increases.

According to reporting by the Vineyard Gazette following similar industry discussions:

"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."

Source: Vineyard Gazette, "Vineyard Has One of the Highest Rates of Insurance Cancellations," January 13, 2025

This perspective is critical for Martha's Vineyard homeowners who may feel climate change doom-and-gloom narratives don't reflect the full picture of what's actually happening in the insurance market.

THE REAL DRIVERS OF RATE INCREASES

Four Key Factors Beyond Climate Risk

Factor #1: Construction Cost Inflation and Supply Chain Disruptions

"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."

Source: Vineyard Gazette, January 13, 2025 (quoting Rich Soo Hoo)

What this means for you: When insurance carriers calculate premiums, they must account for the cost to rebuild your home if it's completely destroyed. The COVID-19 pandemic created massive disruptions in construction supply chains, driving material costs significantly higher. National data shows reconstruction costs increased 5.2% from July 2023 to July 2024 alone, with some states experiencing increases as high as 9.6%.

If your home was last appraised or valued several years ago, you may actually be underinsured—meaning your coverage limit is lower than the actual cost to rebuild. This creates both a coverage gap for homeowners and pricing pressure for insurance carriers who must adjust rates to reflect current replacement costs.

Factor #2: The Carrier "Domino Effect"

Perhaps the most surprising factor Soo Hoo discussed is what he calls the insurance carrier "domino effect"—a market dynamic that has little to do with actual storm risk and everything to do with competitive behavior:

"From a risk management standpoint, carriers usually do not want to be the only option in the market. 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."

Source: Vineyard Gazette, January 13, 2025 (quoting Rich Soo Hoo)

What this means for you: When one major insurance company exits the Martha's Vineyard market, other carriers become nervous about being left holding all the risk. Even if they're profitable insuring Island homes, they don't want to be the only carrier in the market if a major storm does occur. This creates a self-reinforcing cycle where carrier exits trigger more carrier exits—regardless of whether the actual risk has changed.

The result? Fewer insurance options, less competition, and higher prices for consumers.

Factor #3: Exceptionally High Property Values

Martha's Vineyard's robust real estate market is a double-edged sword for homeowners insurance. The median home price on the Island reached $1.55 million in 2025, making it one of the most expensive real estate markets in New England.

According to the Martha's Vineyard Times:

"With dramatically rising property values and a median home price of over $1.55 million, the Vineyard has higher insurance premiums even without climate considerations."

Source: Martha's Vineyard Times, "Islanders see high home insurance rates, yet improved from last season," December 23, 2025

What this means for you: Insurance premiums are calculated based on the value of what's being insured. A $1.5 million home will always cost more to insure than a $400,000 home, regardless of location or climate risk. As Martha's Vineyard property values have increased dramatically over the past decade, insurance premiums have naturally risen in proportion—completely independent of any climate-related factors.

This also explains why many Martha's Vineyard homeowners cannot access the state's FAIR Plan (the insurer of last resort), which caps coverage at $1 million—well below the value of most Island homes.

Factor #4: Fire Risk Infrastructure (Particularly Up-Island)

One factor that surprises many Island residents is that fire risk—not flood or hurricane risk—drives significant insurance costs, especially for up-Island properties.

As reported by the Martha's Vineyard Times:

"Richard Soo Hoo, chief operating officer of Sterling Insurance Group, described a trickle-down effect of firefighters up-Island being mostly volunteers, and a lack of hydrants. He said that signals to insurance companies that the Island doesn't have the resources to stop a house fire quickly, whether warranted or not."

"Up-Island is considered a high fire risk from an insurance standpoint," the local agent said.

Source: Martha's Vineyard Times, "Major insurance providers are leaving Martha's Vineyard," December 11, 2024

What this means for you: Insurance underwriters assess fire protection infrastructure when pricing policies. Properties in areas with volunteer fire departments and limited hydrant access are statistically more likely to experience total losses in the event of a fire, because response times are longer and water supply is limited. This infrastructure gap—not climate change—drives higher premiums for up-Island properties.

The issue became even more prominent after devastating wildfires in California and Maui demonstrated how quickly high-value properties in areas with limited fire infrastructure can be destroyed.

SIGNS OF MARKET STABILIZATION

Reasons for Optimism in 2026

While insurance costs remain high, Rich Soo Hoo and other Island insurance professionals are seeing early signs that the worst may be over.

From the Martha's Vineyard Times:

"I think the cost of home insurance continues to be an issue that Island homeowners struggle with, but I am starting to see some signs that the worst is past us," Soo Hoo said.

Source: Martha's Vineyard Times, December 23, 2025

Additional positive indicators include:

Market Stabilization Signals:

• Rates plateauing rather than continuing sharp increases

• Insurance wholesalers not requesting rate increases for the first time in four years

• Some commercial policies renewing at "flat" rates (same price as previous year)

Soo Hoo's Market Forecast:

"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. [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."

Source: Vineyard Gazette, January 13, 2025

UNDERSTANDING MARKET CYCLES

Insurance Markets Are Cyclical

One of Rich Soo Hoo's key insights during the MVY Radio interview was his emphasis on insurance market cycles. The current "hard market" (characterized by rising rates, stricter underwriting, and reduced capacity) is historically temporary, eventually giving way to "soft markets" where competition increases and rates moderate.

According to the Vineyard Gazette:

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

Source: Vineyard Gazette, January 13, 2025

Understanding Hard vs. Soft Markets:

Hard Market (Current State):

• Insurance carriers restrict coverage availability

• Premiums increase significantly

• Underwriting standards tighten

• Carriers exit high-risk markets

• Limited competition drives prices up

Soft Market (Projected 2027-2028):

• More carriers compete for business

• Premium increases moderate or reverse

• Coverage becomes easier to obtain

• Underwriting standards relax

• Competition drives prices down

The insurance industry has experienced these cycles for decades. While the current hard market is particularly severe—perhaps the worst in recent memory—historical patterns suggest eventual correction as market conditions stabilize and new capacity enters.

WHAT MARTHA'S VINEYARD HOMEOWNERS SHOULD KNOW

Practical Guidance from Sterling Insurance Group

Coverage Review Is Essential

Given construction cost inflation, many Martha's Vineyard homeowners may be underinsured without realizing it. If your home was last appraised or your coverage limit was set several years ago, your policy may not reflect current rebuilding costs.

Action step: Schedule a comprehensive insurance review with a specialized coastal property advisor to ensure your dwelling coverage accurately reflects current replacement costs.

The FAIR Plan Has Limitations

Nearly 40% of Martha's Vineyard residents now obtain coverage through the Massachusetts FAIR Plan (Fair Access to Insurance Requirements), compared to just 2% in many other Massachusetts counties. While the FAIR Plan provides essential safety-net coverage, it has significant limitations:

• Coverage capped at $1 million (below most Vineyard property values)

• Less comprehensive coverage for severe weather events

• Typically more expensive than comparable private market policies

• Designed as "insurer of last resort," not optimal coverage

Action step: Before accepting FAIR Plan coverage, work with an experienced agent to exhaust private market options through specialized high-net-worth carriers.

Multiple Factors = Multiple Solutions

Because rate increases are driven by multiple factors (not just climate risk), solutions must address the full range of issues:

Construction Cost Inflation: Ensure adequate replacement cost coverage with inflation guard endorsements

Carrier Competition: Work with independent agents who have access to multiple carriers, including regional and specialty insurers

Property Values: Consider agreed value policies that eliminate disputes over home valuation

Fire Risk: Invest in fire mitigation measures (fire-resistant landscaping, ember-resistant vents, fire suppression systems) that may qualify for insurance discounts

Why Sterling's Perspective Matters:

As featured experts in both the Boston Globe investigation and MVY Radio's "The Vineyard Current," our team combines:

• Local knowledge: CEO Libby Soo Hoo born and raised on Martha's Vineyard

• Market intelligence: Direct daily experience with carrier behavior and underwriting trends

• Industry credentials: Licensed Insurance Advisor (LIA), Certified Insurance Counselor (CIC), Accredited Advisor in Insurance (AAI)

• Dual-market access: Offices on Martha's Vineyard and Boston serving the full coastal corridor

Don't Wait for a Non-Renewal Notice

Understanding the true drivers of insurance rate increases empowers you to make informed decisions and take proactive steps to protect your property and manage costs.

Whether you're facing non-renewal, experiencing dramatic premium increases, or simply want to ensure your coverage reflects current market conditions, Sterling Insurance Group provides the specialized expertise and market access you need.

Schedule Your Complimentary Insurance Portfolio Review

Martha's Vineyard Office
31 Beach Road
Vineyard Haven, MA 02568
Phone: (508) 687-2750

Boston Office
123 Beach Street
Boston, MA 02111

Online: www.insurewithsterling.com

Listen to the Full MVY Radio Interview: https://on.soundcloud.com/Bl1zRW9Vb13dneZZZY

This blog post summarizes insights from MVY Radio's "The Vineyard Current" interview with Rich Soo Hoo, COO of Sterling Insurance Group (aired January 2026), as well as reporting from the Vineyard Gazette and Martha's Vineyard Times. Direct quotations are attributed to their original sources. For complete context, listen to the full MVY Radio interview at https://on.soundcloud.com/Bl1zRW9Vb13dneZZZY.

This blog post is provided for informational purposes only and does not constitute insurance advice. Insurance coverage, availability, and rates vary based on property characteristics, location, underwriting criteria, and individual circumstances. Consult with a licensed insurance advisor for recommendations specific to your property.

Sterling Insurance Group is licensed to provide insurance advice in Massachusetts. Rich Soo Hoo (LIA, CIC, AAI) and Libby Soo Hoo hold valid Massachusetts insurance licenses.