Consumer Reports Petition Urges Homeowners Insurance Transparency Amid Rising Premiums

A nationwide petition led by Consumer Reports, signed by over 44,000 homeowners including more than 8,000 from the Mountain West, calls on major insurance CEOs to adopt a 'Homeowners Insurance Bill of Rights' aimed at enhancing consumer protections and transparency. This initiative comes amid a 24% rise in average homeowners insurance premiums from 2021 to 2024, driven by factors like inflation, extreme weather, and increased construction costs. The petition urges insurance companies to disclose risk assessment criteria and simplify policy language to prevent unexpected coverage gaps. The petition's proposed protections cover the entire insurance experience, from shopping for coverage to post-disaster claims handling, emphasizing fairness and clarity. Consumer Reports highlights consumer vulnerability to rising premiums and challenges in claim processes, especially after significant home damage due to disasters. The petition advocates these reforms as necessary consumer safeguards in an increasingly complex insurance market. Industry groups, including the National Association of Mutual Insurance Companies (NAMIC) and the American Property Casualty Insurance Association (APCIA), refute allegations that increased premiums stem from unfair practices. They emphasize existing state regulations and consumer protections already governing claims handling, policy cancellations, transparency, and communication. These associations welcome dialogue but caution against oversimplified solutions that overlook market complexities. In the Mountain West, legislative activity on homeowners insurance includes over a dozen bills, with several passing laws focusing on defining high-risk areas, enhancing transparency, and incorporating wildfire mitigation in underwriting. Nevada passed a law granting insurers more flexibility to encourage competition, potentially permitting policies that exclude wildfire coverage. Consumer Reports advocates for both legislative action and voluntary insurer adoption of its proposed reforms, considering insurer willingness the quickest path to meaningful change. This regional issue reflects national trends where escalating risks and market pressures challenge both insurers and policyholders, underscoring the need for clear standards and transparent practices in homeowners insurance.