An obscure federal agency recently released what it calls the “most comprehensive data on homeowners insurance in history.” And the picture it paints for the Mountain West is a concerning one.
Homeowners’ insurance is getting more expensive and more difficult to get, thanks to factors like wildfires and other climate-fueled disasters, as well as rising costs of construction and reinsurance. That’s the conclusion of the Treasury Department’s Federal Insurance Office, which looked at nearly 250 million policies between 2018 and 2022 – the fruit of a first-of-its-kind data collection effort. Nationwide, insurance premiums rose 8.7% faster than inflation on average. It’s a worse situation in large swaths of the West.
Michael DeLong, with the advocacy association Consumer Federation of America, pointed to ZIP code-level maps in the FIO report showing many parts of Oregon and Idaho dealing with sizable premium jumps.
“Large sections of Colorado, in fact, almost all of Colorado, you're seeing big premium increases,” he added. “You're seeing less significant but still substantial premium increases in parts of Nevada, Arizona, New Mexico, Wyoming, Montana.”
Much of the report’s analysis was regional, and in the Southwest region, which includes several Mountain West states like Utah and Colorado, there were higher non-renewal rates and larger average claims than the rest of the country. DeLong recommended that states establish funds to help people protect their properties, and require insurers to account for such improvements when deciding who to cover and how much to charge.
Insurance industry representatives have called the FIO report “flawed.” Jimi Grande, with the National Association of Mutual Insurance Companies, criticised it as a “frustration to anyone who understands the basic insurance principle of matching rate to risk.”
A bill has also recently been introduced in the U.S. House of Representatives that would abolish the FIO, which was established by the 2010 Dodd-Frank Act. Its sponsor is Republican Congressman Troy Downing, Montana’s former insurance commissioner.
“The law is clear. Regulation of the insurance industry rests with the states, not big government,” Downing said. “FIO is a duplicative federal bureaucracy whose existence hinders the efforts of state regulators better equipped to address the insurance needs of their communities.”
“Abolishing the (FIO) would make a bad insurance situation probably even worse, because we'd be less informed about it,” DeLong said.
This story was produced by the Mountain West News Bureau, a collaboration between Wyoming Public Media, Nevada Public Radio, Boise State Public Radio in Idaho, KUNR in Nevada, KUNC in Colorado and KANW in New Mexico, with support from affiliate stations across the region. Funding for the Mountain West News Bureau is provided in part by the Corporation for Public Broadcasting.
