WASHINGTON, DC – Unlocking America’s Future (UAF) is sounding the alarm on the compounding financial crisis facing American homeowners as Winter Storm Fern’s estimated $100 billion in economic damage collides with skyrocketing home insurance premiums that have left millions of families vulnerable to financial catastrophe. The storm, which brought devastating ice and snow across the South, exposed the widening gap between what families believe they’re covered for and the harsh reality of inadequate, exploitative insurance protection in an era of increasingly severe weather events.
Large home insurers delay, deny, lowball, and defend an increasingly broken system for homeowners. Denial rates by large home insurers have grown to between 40% to 70% of claims on average, and insurers now abuse the legal system by refusing to even settle legitimate claims, which often results in homeowners giving up or settling for pennies on the dollar. This profit maximizing process generated record profits of $169 billion for the sector last year.
“Not only are homeowners paying higher premiums for less coverage, but when disasters like Winter Storm Fern strike, they’re discovering their policies fall catastrophically short of what’s needed to rebuild,” Kyle Herrig, Unlocking America’s Future. “Meanwhile, insurance corporations are posting record profits while abandoning the families who need them most. This manufactured crisis is something state legislators and insurance commissioners must address now by implementing comprehensive consumer protections that will actually protect American families.”
The home insurance crisis has been building for years as major insurers have systematically exploited regulatory loopholes, abandoned entire markets, and pushed through massive rate increases while simultaneously reducing coverage and denying legitimate claims. State insurance commissioners have largely sided with insurance corporations over consumers, approving rate hike after rate hike with little scrutiny of insurers’ actual financial needs or their record profits.
As families across the storm-affected regions begin the difficult process of filing claims and assessing damage, a new report from Consumer Reports and analysis from Public Citizen offer a roadmap for reforming the broken home insurance system to prioritize families over corporate profits.
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