After the losses from last winter that were greater than $1 billion, insurers have received approval for hikes.
Although a decision has already been made to approve the homeowners insurance rates hikes that were requested by some of the top insurers in Massachusetts, the chairman of the Division of Insurance state Senate committee is now seeking to have that decision reconsidered by opening hearings to determine if those increases are truly justified.
This is focused primarily on the rate increases approved for two of the largest insurers in the state.
Senator Michael J. Barrett sent a letter to Daniel Judson, the Massachusetts Insurance Commissioner, citing a recent analysis conducted by Attorney General Maura Healy, in which it was determined that the rate increases that were approved are actually excessive. The amount by which two homeowners insurance rates will be increasing, on average, for those two companies is 9 percent. The insurers in question are Safety Insurance Co. and Mapfre USA Corp.
According to the analysis, the homeowners insurance rates should have been falling, not rising.
The analysis conducted by Healy showed that Mapfre should have been decreasing the amount it was charging for home insurance, when taking into consideration its profits and losses over the years. At the same time, while the analysis did say that Safety was justified in requesting an increase, it also pointed out that it didn’t need to be any greater than 3 percent.
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According to Barrett (D – Lexington), the Senate’s Post Audit and Oversight Committee chairman, before the rate increases are allowed to go forward, they should undergo further scrutiny and public hearings. Consumers have already been making those requests, but the Division of Insurance rarely allows for public hearings within the state.
Barrett said that “We need a formal, serious public consideration of the new rates,” adding that “This is a question now of putting at ease legitimate concerns that something went off the rails in this particular case.”
A Division of Insurance spokesperson, Chris Goetcheus, stood behind the homeowners insurance rate process used by the agency. He said that the agency already conducts its reviews of rate filings “with the best interest of both the consumers and the marketplace in mind to ensure that rates are not excessive, unfairly discriminatory, or inadequate.”