A major US insurer has responded to expert advice that a hurricane could strike New York by declining to renew cover for thousands of homeowners in the most exposed areas of the state.

Reports from New York say as many as 26,000 householders have been dumped by the state’s largest insurer, Allstate, after the National Oceanic and Atmospheric Administration predicted the city could be hit by a hurricane “soon”.

Other insurers, stung by the losses resulting from Hurricane Katrina in the gulf states last year, have decided not to take new business.

Allstate says a “Katrina-like” hurricane could hit New York in the northern autumn. The statistical frequency for major hurricanes in the state is one every 50 years, and the last was 68 years ago.

State Insurance Department Superintendent Howard Mills says Allstate has acted harshly, but within the law. “We would have liked to have seen a gradual reduction,” he said. “This was unnecessary, and much too sudden.”