NCPA - National Center for Policy Analysis

2011 Property and Casualty Insurance Report Card

July 21, 2011

In this report by the Heartland Institute, researchers ask two basic questions about property and casualty insurance products: How free are consumers to choose the property and casualty insurance products they want?  And how free are insurers to provide the property and casualty insurance products consumers say they want?

  • Reviewing the data on insurance in 2011, there is once again a modest, uneven, but nonetheless real trend towards more freedom for consumers and businesses in the homeowners' and automobile insurance realms.
  • Although state-level insurance bureaucracies make it difficult, sometimes impossible, for insurers to offer consumers the products they need, want, and deserve, burdensome regulation shows signs of easing.

As with any complex policy issue -- particularly one where public policies differ in each of the

51 U.S. jurisdictions that regulate insurance -- progress did not happen evenly, and positive trends came along with negative ones.

For example:

  • With significant bipartisan majorities, Florida's legislature attempted to reduce the size and scope of the state's extensive insurance market interventions. Florida experienced a wave of insurer insolvencies resulting mostly from over-regulation of the market.
  • The widely accepted, pro-consumer practice of using credit scores to help determine insurance rates came under attack in Massachusetts, Michigan and Washington state. Despite significant state legislative action, however, no state actually passed a law banning the practice.
  • Sweeping, market-restricting automobile insurance reforms in Massachusetts and Michigan gained significant support but did not pass legislatures in either state.
  • The Deep Water Horizon oil spill raised questions about certain types of commercial coverage and resulted in record-high claims for BP's insurers.
  • Major property and casualty insurers have not introduced a single major new personal lines property and casualty insurance product since modern homeowners' insurance became available in 1959.

Source: Eli Lehrer, "2011 Property and Casualty Insurance Report Card: A State-by-State Analysis of Regulatory Burden," Heartland Institute, June 2011.


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