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Debate Du Jour

Erin L. Ayers, Editor of The Standard
It's official. Coastal homeowners coverage will be the insurance issue du jour for Massachusetts lawmakers, trumping auto insurance as the major must-fix.
It's official. Coastal homeowners coverage will be the insurance issue du jour for Massachusetts lawmakers, trumping auto insurance as the major must-fix.

It wasn't really up for debate that legislators in Connecticut and Rhode Island would be focused on coastal insurance. Although neither state's property insurance market is dwindling to the degree that the Bay State's is, neither state has the perennial monkey on its back known as Massachusetts auto insurance. So, once they get tired of wrestling with health insurance, they'd naturally turn to homeowners insurance.

In Massachusetts, though, lawmakers are coming off two years of intense lobbying and advertising about the dismal fate of their constituents should auto insurance be fixed or left alone, depending on whom you listen to. Politicos could conceivably have bought one argument or the other and toiled away on auto insurance, ignoring the plight of property owners.

However, homeowners insurance has reached a level that auto insurance has, to date, not– it has spawned a citizens action group that was not ultimately an effort by auto insurers to sway the public to its way of thinking. The Cape Cod-based coalition, called the Citizens for Homeowners Insurance Reform, reportedly wants reasonable insurance prices. There's currently a disconnect between the industry and property owners on what constitutes reasonable.

Here's the problem – even if insurers and reinsurers were not terrified about billion-dollar storms, homeowners insurance coverage would not cost what it did 10 years ago. Insurers spent much of the 1990s undercutting each other on price and basically giving away coverage. Insurance today more accurately reflects not only the risk of loss, but the value of the property at risk.

It's never a bad idea for consumers to get involved and get educated on major expenditures like insurance. It is, after all, a topic that rarely rises above the business pages of most newspapers. However, the call for solutions frequently translates for some into "Find some way for me to pay less" and becomes so loud and persistent that policymakers fail to hear other opinions and options.

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