Filed Under:Carrier Innovations, Regulation/Legislation

Top 10 states for homeowners’ insurance protections

How well do states protect homeowners’ insurance policyholders? (Photos: Shutterstock)
How well do states protect homeowners’ insurance policyholders? (Photos: Shutterstock)

Agents are well-aware of how state insurance regulations can affect themselves and the insurance industry as a whole. It’s also important to also know how they affect policyholders, especially homeowners.

Related: 15 surprising consumer actions & beliefs related to homeowners' insurance

According to a report by the Rutgers Center for Risk and Responsibility at Rutgers Law School, states differ dramatically in how much and what kind of regulation they provide for the benefit of homeowners’ insurance policyholders. The report, titled “State-by-State Rankings: ‘Use It and Lose It,’” ranked all 50 U.S. states and D.C. on how state insurance regulations protect policyholders based on the university’s Essential Protections for Policyholders project.

According to Rutgers, homeowners in particular can be subject to certain practices including surcharging, increasing premiums and refusing to renew policies because policyholders have made inquiries about coverage or have filed a single claim. These practices, called “use it and lose it,” are typically regulated by states. However, the university’s report found that 18 states have no explicit protection at all from these kinds of practices.

Related: Top 15 homeowners' insurance carriers for 2016, as ranked by NAIC

Other key findings of the report include:

  • 22 states bar an insurance company from treating a simple inquiry about coverage as a claim, either for non-renewal, premium increase or both.
  • 10 states prohibit treating a claim for which no payment is made as a claim.
  • 15 states prevent an insurance company from using a single claim as a basis for non-renewal. Only five of these states also prohibit using a claim as a basis for a premium increase.
  • 18 states prohibit the use of claims due to weather or natural disastersfor premium increase or non-renewal.

The report rates each state on a scale from one to five stars based on “how well it meets the Essential Protection standards for use and lose it.” Download the full report “State-by-State Rankings: ‘Use It and Lose It,” or keep reading to see the top 10 states for homeowners’ insurance protections.

Related: Insurance agents need specific notice when homeowners' property use changes

(Photo: Shutterstsock)

10. Pennsylvania


Rating:
4 stars

Pennsylvania is the last state to receive a four-star rating in Rutgers’ rankings. Coming in right after it at 11 is Georgia with 3.5 stars. The state’s neighbor to the east New Jersey on received 3 stars, ranking at 18.

Related: 10 states with the highest and lowest homeowners' insurance rates

(Photo: Shutterstock)

9. Montana


Rating:
4 stars

Montana did much better than its neighboring states to the south, with Wyoming ranking 20th with a three-star rating and Idaho coming in at 33 with only one star.

Related: 5 factors to minimize home-related risks

(Photo: Shutterstock)

8. Minnesota


Rating:
4 stars

Minnesota shares a border with the lowest-ranking state in the report: Wisconsin, which only has a one-star rating.

Related: Here are the top 10 states people are moving into

(Photo: Shutterstock)

7. Maryland


Rating:
4 stars

Related: 15 preventable homeowners' insurance claims and how to avoid them

(Photo: Shutterstock)

6. Louisiana


Rating:
4 stars

Related: 6 homeowners’ policy endorsements agents and brokers need to know

(Photo: Shutterstock)

5. Delaware


Rating:
4 stars

Related: U.S. homeowners' premiums to reach $91B for 2016

(Photo: Shutterstock)

4. Oklahoma


Rating:
4.5 stars

Related: My homeowners' policy covers that?

(Photo: Shutterstock)

3. District of Columbia


Rating:
4.5 stars

Related: These 10 states have the lowest Homeowners’ premiums

(Photo: Shutterstock)

2. Texas


Rating:
5 stars

Texas is one of only two states that received a five-star rating. See who ranked number one by clicking “next.”

Related: Home, sweet home: Homeowners' insurance by the numbers

(Photo: Shutterstock)

1. Rhode Island


Rating:
5 stars

Rhode Island and Texas are the only states that earned a five-star rating for protecting consumers from improper rate increases and non-renewals for inquiries, claims closed without any payment and a single claim according to the Rutgers report.

Related: Top spring hazards homeowners face in each of 8 U.S. regions

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