Homeowners” Insurance Woes Aired
State officials say they are receiving an increasing number of complaints from consumers about the cost and the difficulty of finding and keeping homeowners´ coverage.
California´s largest insurer, State Farm, has stopped accepting new homeowners´ insurance customers, and many other insurers have imposed more stringent homeowner underwriting criteria.
But State Insurance Commissioner Harry Low told the Senate Insurance Committee today that 73 companies are still writing new homeowners´ policies in California and another 62 are accepting policy renewals.
Insurers who can´t get coverage from those companies can get a basic plan from an industry-sponsored insurance pool.
State officials say homeowners´ rates jumped an average of 15 percent this year, but for some the cost of homeowners´ coverage has doubled or tripled.
Insurers say booming housing values, higher repair costs, skyrocketing water damage claims, growing litigation costs and more fraud are the main reasons for the higher insurance costs.
But at least one consumer advocate, Doug Heller of the Foundation for Taxpayer and Consumer Rights, suggests the industry is responding to its losses in the stock market and is trying to tighten the homeowners´ insurance market to make rate increases more acceptable.