Alliance Responds to IIABA Survey on Homeowners Market

The Alliance of American Insurers (AAI) responded Tuesday to a recent report from the Independent Insurance Agents and Brokers of America (IIABA), addressing the homeowners market (see IJ Web site May 13) in the U.S.

“In the best of years, there is always turnover in the property insurance business. Homeowners policies are cancelled or non-renewed for a variety of reasons, by both property owners and their insurance companies,” said Rey Becker, Alliance vice president for property/casualty. “A turnover of 2.5 million policies constitutes only 3.4 percent of the 72.6 million owner-occupied housing units in the U.S. spread-over two years.”

“As to homeowners insurance premium increases over the last two years, it is a matter of public record that insurers faced significant natural catastrophe and mold-related losses, as well as the aftermath of 9/11/01, that had to be addressed. Many insurers also needed to diversify and reduce their concentration of risk in some areas of the country. It is also important to note that rates have now largely stabilized.”

Becker went on to say that he agreed with the IIABA’s sentiments that ‘consumers should not feel helpless…they can affordably protect themselves and their homes even in this difficult market.’

He added that, “consumers need more information and suggestions on what they can do to improve and enhance their own insurability.” Additional facts include:

·Not every cancellation or non-renewal is due to claims history. Many cancellations are at the request of the property owner related to the sale of the home, mortgage refinancing or switching insurance carriers for a lower premium, etc. In the case of non-renewals, the customer has already gotten everything they paid for under the contract, and either party is perfectly free to decline to continue the relationship;

·For homeowners experiencing unusual difficulty finding coverage from an insurance company, there are 30 states providing a ‘backstop’ through FAIR Plans, and insurance agents can place their customers in these plans;

·We agree with the IIABA’s advice (from its recent release and website) and join them in urging consumers to actively monitor their own claims; learn more about the claim history of a house before buying; explore deductibles, combining homeowners and auto policies with the same insurance company, installing security systems and smoke alarms, and avoiding or eliminating dangerous conditions, including pools, trampolines or vicious dogs.