Consumer Reports Urges Major Insurers to Enhance Homeowners Insurance Transparency

Consumer Reports has petitioned 28 CEOs from major U.S. homeowners insurance companies, including State Farm, Allstate, and Liberty Mutual, urging them to adopt a Homeowners Insurance Bill of Rights to enhance fairness and transparency. This initiative responds to challenges faced by policyholders amid rising premiums, unexpected policy non-renewals, and restricted coverage options. Consumer Reports highlights that extreme weather events, inflation, and increasing construction costs are destabilizing the homeowners insurance market, prompting significant premium hikes and coverage cancellations. A 2024-2025 survey involving nearly 24,000 U.S. homeowners revealed that over half experienced premium increases, with some premiums doubling or even tripling, and 9% faced policy cancellations. Consumers have reported difficulties with abrupt policy changes, unforeseen costs, and obstacles in securing reliable insurance alternatives. The petition reflects widespread demand for stronger consumer protections and market stability. Consumer Reports outlines nine key protections for policyholders, including clear explanations of coverage terms prior to purchase or renewal, transparency about risk factors influencing eligibility and rates, equitable access to coverage based on property risk rather than financial status, and adequate notice of cancellations, nonrenewals, or substantial premium increases. Additional protections call for incentives for home hardening, safeguards against post-disaster cancellations, freedom from penalties for non-payout claims, prompt and fair claims payments with accountability, and immediate financial assistance after disasters with minimal bureaucracy. This advocacy effort aligns with ongoing discussions between consumer groups and insurers, aiming to address market challenges and improve consumer confidence. Enhancing transparency and fairness in homeowners insurance is critical as the industry copes with increasing volatility driven by economic and environmental pressures.