Massachusetts to Investigate Homeowners Insurance Rate Increases

Snowstorm view from Prudential Tower at dusk in downtown Boston.

In Massachusetts, homeowners have been hit hard in the last few years by huge hikes in homeowner insurance rates. Big winter storms and record snowfall have forced insurers to push rates up to cover the cost of the thousands of claims they have received. There have been some concerns by both homeowners and lawmakers as to whether these big increases are justified.

Homeowners have complained to local lawmakers that the rate increases have put them in financial stress, which has prompted lawmakers to examine the issue of rate increases. Recently, the state Senate kicked off an investigation with the Senate Post Audit and Oversight Committee taking the lead.

Senator Michael Barrett will head the investigation. The panel is charged with looking into the issue and will closely investigate Massachusetts’s rate review process with the goal of ensuring that it is fair to both homeowners and the insurance companies that write polices in the state.

The state investigators will require that insurers provide information about their recent rate increases as well as the reasoning behind the premium hikes. State insurance regulators will also be providing information about the rate review process, as it exists today.

Mapfre USA, which is one of the largest homeowner insurance providers in the state, recently received approval to jack insurance rates up by 8.9%. Other insurers in the state have requested rate increases that are even higher. Safety insurance requested a 9.1% rate increase while Bunker Hill insurance is looking to raise rates by 7.8%.

According to industry experts these increases will add roughly $100 a year to policies in Massachusetts where the average homeowner pays between $1,150-$1,250 per year for homeowner coverage. According to the Massachusetts insurance division there are roughly 1.86 million homeowners insurance policies active in the state. The typical annual increase ranges between 2 and 3 percent.

Homeowners are struggling under the constant barrage of increases but insurers are adamant that the rate increases are necessary for the financial health of their business. This past winter was particularly hard as insurers saw huge financial losses due to snowstorms and other natural catastrophes.

The committee, which is armed with subpoena power, will request explanations from insurance executives about these unusually high premium increases. They will also be examining why state insurance regulators approved them without seeking comment from the public.

While the panel may find it necessary to change up the rate review process there is a good chance it will be quite a while before changes are actually made. The panel, in its investigation will be questioning regulators as well as insurance professionals to determine the best course of action for both the insurance industry and homeowners.

While it is possible that homeowners may see some financial relief due to the changes, it will probably be months if not years before that happens. Changing the rate review process will only make it more difficult for insurers to raise rates, it will not prevent rate increases altogether.

If you are in need of a homeowners insurance policy review, please request free quotes from us at HomeInsuranceKing.com so we can present the most affordable Massachusetts homeowners insurance rates available. Shop online or give us a call today!