Essential Protections for Policyholders addresses state regulation of homeowners insurance, analyzing key issues, surveying current law, and recommending action. The report draws on an extensive database of state laws and on the experience of United Policyholders, the nation’s leading support and advocacy organization for insurance consumers.
The Essential Protections also provide a scorecard to evaluate states’ current systems of regulation and to identify areas for improvement. How well does each state measure up in providing consumers the Essential Protections?
The project is issuing a series of reports on state-by-state rankings of key issues.
Use It and Lose It
A homeowner who has paid premiums for years suffers a loss and files a claim; the insurance company responds by dramatically raising the homeowners’ premium or even refusing to renew the policy altogether. Even if the homeowner just calls their insurance agent to see if a loss would be covered or files a claim for which the company doesn’t pay anything, the event may get recorded and treated as if a claim was paid, resulting in a premium increase or non-renewal.
This is the practice known as “Use It and Lose It.”
This report ranks states on regulation of an insurance company’s ability to non-renew, surcharge, or raise premiums because a policyholder makes an inquiry about coverage or files a claim—Use It and Lose It.
Consumers need information about three things when buying or renewing homeowners insurance policies: Coverage, Quality, and Price. If consumers have full, understandable information about insurance policies and insurance companies they are better able to make wise buying decisions, and that creates competition among companies that leads to better products and fairer prices.
The rankings in this report are based on how well states provide information about coverage, quality, and price through their insurance department websites, the most accessible form of information for consumers, and how well states require insurance companies to provide information to consumers.
The protection and security that a homeowners insurance policy provides is most effective—or it fails—when a policyholder files a claim. When a loss occurs, the policyholder trusts that the insurance company will process and pay the claim promptly and fairly. For an insurance policy to provide the protection and security it promises, the policyholder must have access to a fair, effective, and efficient process for resolving these disputes and for remedying any improper conduct by the company.
The rankings in this report are based on key elements in providing homeowners insurance policyholders with effective remedies for disputed claims.