Statehouses across the West are considering reforms to respond to the homeowners insurance crisis. While some are hitting headwinds, concern about the issue isn’t going away.
For decades, state-level insurance policymaking was a relatively quiet affair, according to Jordan Haedtler, a climate financial strategist with the nonprofit Climate Cabinet, which has pushed for reforms to maintain insurance access and affordability. But with premiums and non-renewals soaring, there’s been a flurry of proposals from lawmakers in recent years.
“We've seen legislation introduced on this topic basically in every Western state,” he said.
A notable trend this year, he said, is a number of reforms that mirror a Colorado bill that passed last year. House Bill 1182 requires insurers to account for mitigation efforts and provide more transparency to customers about the risk models they use.
Late last year, Haedtler wrote bills like 1182 “can support healthier insurance markets.”
“Homeowners want a clear picture of what mitigation steps will result in more affordable insurance,” he continued. “Compelling greater transparency in risk modeling and clarifying the expectation that hazard mitigation is a factor in that modeling will likely yield more responsible actions from governments, insurance companies, and policyholders alike.”
New Mexico, Washington, Idaho and Oregon lawmakers introduced such measures this year, though they’ve all faced significant challenges.
In Idaho last week, House Bill 618 was blocked by a House committee along party lines after the industry and several Republican lawmakers raised concerns about costs of implementation and fears of being forced to share proprietary information or trade secrets.
“Our concern is that [HB618] creates a broad and highly prescriptive mandate that will increase compliance costs and confusion without reliably improving transparency,” said Elizabeth Criner, a representative of the American Property Casualty Insurance Association.
“This level of detail being required out of this bill is going to drive up the cost of premiums for others as well,” she added.
“It’s fair to say insurers have these concerns generally about these ‘wildfire risk transparency’ bills as they come up in other states,” said Kenton Brine, president of the Northwest Insurance Council, an industry nonprofit.
“We are not requiring insurance companies to do anything other than provide the information they use to determine our risk level currently,” Rep. Monica Church (D-Boise) – one of the Idaho bipartisan measure’s backers – said earlier in the hearing.
“If I gave you a grade, and didn't tell you what I was grading you on, or how you could get better, that would not be very easy for you to understand,” she added. “We need to know as consumers what is happening and how we can mitigate.”
Even though the measure’s advance was defeated by a wide margin, she said that this year’s session has gone very differently from last year’s, when no insurance reforms advanced. The legislature is still considering setting a minimum 60-day notification for homeowners policy non-renewals and creating a fund to support mitigation efforts.
Last session, “lawmakers were not willing to even admit that there was a problem,” Church told the Mountain West News Bureau.
“What we heard in the hearing today was that there was definitely a problem…, that folks recognize that there are solutions to the problem,” she added. “They just don't know what those are at this time.”
The first-term state lawmaker said that her grandfather – former Democratic four-term Idaho Gov. Cecil Andrus – believed that significant policy change in a conservative state like Idaho “typically takes three years.”
“And next year, we're going to find the solution that works for Idaho, and works for Idaho homeowners and business owners,” Church added.
This story was produced by the Mountain West News Bureau, a collaboration between Boise State Public Radio, Wyoming Public Media, Nevada Public Radio, KUNR in Nevada, KUNC in Northern Colorado, KANW in New Mexico, Colorado Public Radio and KJZZ in Arizona as well as NPR, with support from affiliate newsrooms across the region. Funding for the Mountain West News Bureau is provided in part by the Corporation for Public Broadcasting and Eric and Wendy Schmidt.
