A state Senate committee will investigate “troubling” increases in Massachusetts homeowner insurance rates after a severe winter that produced record snowfall and claims for damage.
Sen. Michael Barrett (D-Lexington), chairman of the Post Audit and Oversight Committee, wants greater transparency in the Division of Insurance’s rate approval process to ensure hikes are justified. A September hearing is planned.
The DOI so far has approved an 8.9 percent rate hike for Mapfre USA, ?9.1 percent for Safety Insurance and 7.8 percent for Bunker Hill Insurance — increases that’ll add $100 or more to homeowners’ bills, according to Barrett. Annual rate hikes usually average 2 percent to 3 percent, he said.
“The public could have been given a seat at the table before these ?homeownership insurance rates became final,” Barrett said. “Rates in past years were supposed to have anticipated the occasional bad winter. We will be asking whether these … increases will be factored into a permanent base of charges going forward or … rolled back following this year of extraordinary cost-recovery.”
Factors weighing into rate increases include anticipation of future potential exposure risks, the costs of those risks, inflation and past loss experience, typically over a 20-year period, according to the DOI. It’s too early to compare 2015 data to previous years since only four of the top 10 insurers have submitted rate filings for only a portion of their customers, spokesman Pete Fullerton said.
Attorney General Maura Healey’s office said it also needs to take a close look at private insurer rates and is exploring ways to give ratepayers a greater voice in the rate-setting process.
