It turns out that not only is Connecticut the insurance capital of the world, it’s also one of the best places in America to insure your home, thanks to the strict oversight of the state Insurance Department when it comes to insurance companies requesting rate increases.
Researchers at the Harvard and Wharton business schools have determined that, nationally, when states exert strong oversight over insurance rate requests, homeowners are the winners. And when they don’t – as is the case in many midwestern and Southern states – homeowners are big losers.
The research and findings were highlighted in a recent New York Times news story, “Home Insurance Rates in America Are Wildly Distorted. Here’s Why.” https://www.nytimes.com/interactive/2024/07/08/climate/home-insurance-climate-change.html?searchResultPosition=1
“This story really lets you peek behind the curtain of home insurance rates in America, and it’s nice to see that Connecticut residents are paying less for homeowner’s insurance than the average American. I give our state Insurance Department full credit for that,” said state Senator Jorge Cabrera (D-Hamden, who is Senate Chair of the legislature’s Insurance and Real Estate Committee. “For those who sometimes complain about government oversight of private-sector businesses, this is one of those instances when the average person will say ‘Thank you for holding their feet to the fire.'”
Researchers determined that – even accounting for differences in home values and the traumatic effects of global warming on the creation of larger and more damaging storms — higher home insurance premiums were charged in states where regulators applied less scrutiny to requests for rate increases, and premiums decreased in states were regulators applied more scrutiny.
Connecticut is a “more scrutiny state.” In 2023, there were 132 homeowner’s insurance rate filings recorded, with an average requested rate increase of 11.1 percent. The average allowed by the state Insurance Department was 9.6 percent. Efforts to hold down homeowner’s rate increases saved Connecticut policyholders $24.76 million in 2023 and have saved state residents $115.64 million since 2012.
It’s pro-consumer decisions like this by Connecticut state government that allow Connecticut residents to pay home insurance premiums well below the national average. The average home insurance premium in Hartford County is $1,543, and rates have increased just 12.9% since 2020. But nationally, the average homeowner pays an insurance premium of $2,530, and has seen their rates increase 33% since 2020.
And rates are even higher in the states where Connecticut residents move to the most:
-In Coral Springs, Florida, the average homeowner insurance premium is $5,579 a year, and rates have increased 51% since 2020
-In Myrtle Beach, South Carolina, premiums are $2,308 a year, and rates have increased 38% since 2020.
-In Dallas, Texas, premiums are $1,950 a year, and rates have increased 20% since 2020.
-In Fayetteville, North Carolina, premiums are $1,827 a year, and rates have increased 21% since 2020.
Posted by Lawrence Cook
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