A tidal wave of home and auto insurance premium increases in Connecticut is sparking a surge of complaints to state regulators and prompting an outcry on social media as consumers work to sort out double-digit hikes in their policy renewals.
Complaints filed with the state insurance department so far this year total nearly 225, already surpassing 2023’s tally by almost 20%, according to statistics provided by the department. And consumers are taking to Facebook to vent their frustrations.
Insurance Commissioner Andrew N. Mais acknowledged the sticker shock accompanying policy renewals in Connecticut.
“This is not a Connecticut-only phenomenon,” Mais said. “This is a national phenomenon to say the least.”
In March, Mais, also president of the National Association of Insurance Commissioners, told a gathering of its members that the goal must be ensuring “that as many people as possible have access to as many relevant products as possible without any unnecessary barriers.”
“Implementing that idea, of course, is far more complicated,” Mais said, according to a transcript of the speech.
In a recent interview with The Courant, Mais said consumers having access means not only by price but by choice of property-casualty insurers that are financially sound and able to cover claims when they are submitted.
“Insurers have to be solid,” Mais said. “That is one of our primary responsibilities as regulators. We have to make sure that when something happens – when that Covid event occurs – the insurer is able to pay, which means that rates have to be adequate to cover the costs.”
“So you’re looking at ever increasing costs, significantly increasing costs, certainly over the past few years,” Mais said. “And the rates, in a sense, reflect that cost.”
A recent post in the “Neighbors and friends in West Hartford” Facebook group, however, was a clear sign of growing consumer frustration. The post drew 88 responses, one of at least four other similar posts in the group.
“We have been living in our home for 15+ years. Never had any claims. Our home insurance quote shot up by 50% with our current insurer. Other companies quoted even higher. Similar issues with car insurance.”
‘Get very aggressive’
The property-casualty industry argues that homeowner premiums are rising along with home values and the cost of construction materials and repairs. Similarly, auto prices have jumped along with the cost to repair increasingly sophisticated technology.
A spike in inflation is partly to blame, but an ever larger, looming concern is climate change and how intensifying weather events are driving up insurance claims, Mais said. While Connecticut does not have the same risk of hurricanes like Florida or Texas, Mais said there is evidence of more and increasingly violent thunderstorms.
A review by The Courant of insurer rate-change requests so far this year shows that decisions have been reached in 70 homeowner insurance cases. Of those requests, 66% sought double-digit increases, the highest being a 35% rate hike
After an analysis by the insurance department, a quarter of the requested increases were reduced in size.
“We are looking at everything they are putting into their rate filing, from the predictive models that they are using to the costs that they have to pass on.” Mais said. “We do everything in our power to keep the rates as affordable as possible.”
George Bradner, director of the insurance department’s property and casualty division, said one component that the regulators examine is the “trend factor.” The trend factor is what companies project their costs will be ultimately, Brader said.
“The actuaries look really closely at that,” Bradner said. “Some companies get very aggressive on that. They put a heavy impact of inflation and supply chain issues. The actuaries will look at that, and what’s reasonable.”
“If they think a company is being overly aggressive in that area, they will push back and work with the company to come up with a number the actuaries are more comfortable with,” Bradner said.
Bradner said the review can also include an insurer’s cost for reinsurance, policies companies take out to cover their losses.
The analysis also will evaluate what the insurer places on risk of a natural catastrophe such as hurricanes, tornadoes or flooding.
“We might feel that it is too large and not reflective of Connecticut,” Bradner said. “We try to say, ‘Well, give us some Connecticut-specific information. We want to see how this relates to Connecticut.”
“You can’t just give us a countrywide model and use data coming from Oklahoma or Texas,” Bradner said.
A recent report by Insurify, an online insurance marketplace, forecast higher homeowner insurance costs virtually across the board. Connecticut was ranked by the report as ninth on a list of the top 10 states where rates are expected to increase the most by the end of 2024.
Currently, the average annual home insurance rate is $1,764, but that is projected to increase by 9% to an average of $1,972, according to Insurify.
For auto coverage, decisions by the state insurance department haven been made in 79 rate-change requests so far in 2024. Double-digit increases were sought in nearly 70% of the cases. The department reduced the original requests in about 15% of the cases, according to The Courant’s review.
Beyond larger factors
A year-end report for 2023 on rate-change reviews by the state insurance department does show some savings for consumers.
According to the report, homeowner policyholders in Connecticut were saved $25 million from reductions in rate requests. The savings for auto policyholders was $157 million.
Auto and homeowner policy rates are just one part of the equation when a customer premium is being determined by an insurer.
An individual’s final auto premium also depends on additional factors beyond the larger economic factors of inflation, repair costs and overall severity and frequency of accidents. Those factors include geographic area, vehicle type, driving record and credit history. Changes can affect the premium, according the Connecticut Insurance Department.
For homeowners policies, individual premiums are adjusted for property location, construction type and year, hurricane risk and coverage amount, the insurance department said.
In Connecticut, there were indications of the coming wave of premium increases, according to the state insurance department’s year-end report.
In 2023, there was an average overall rate increase for auto policies of 11.2%, up from 4.9% in 2022. Rate change filings jumped by more than 50%, rising to 138 in 2023 from 90 in the previous year.
Kenneth R. Gosselin can be reached at kgosselin@courant.com.
