AB1191 Would Help Homeowners Understand Rate Hikes and Non-Renewals; Correct Mistakes in Homeowners Insurance Policies
Sacramento, CA — Legislation that would require insurance companies to identify the reasons behind rate increases and non-renewals to homeowners passed out of the Assembly Insurance Committee Wednesday. The Foundation for Taxpayer and Consumer Rights (FTCR), which is sponsoring the proposal, known as AB 1191 (Wiggins), is pressing for greater disclosure by insurers in light of the tremendous increase in rate hikes and insurance non-renewals over the past year. According to FTCR, consumers need to know what information companies use to calculate rates or drop coverage in order to correct any mistakes.
“Insurance companies are becoming more aggressive towards their policyholders and customers feel powerless to protect themselves,” said FTCR’s consumer advocate Douglas Heller. “This bill provides consumers with the basic information that they ought to be told when their insurance company jacks up their premium or kicks them off the rolls,”
Under AB 1191, insurance companies would be required to inform consumers exactly why their homeowner’s insurance policy premium increased or why the customer was not allowed to renew the policy. Consumer groups have seen a dramatic upsurge in complaints by homeowners who face rate hikes and non-renewals, yet receive no explanation for the change. Consumer advocates are concerned that many of the hikes and non-renewals are for minor claims and sometimes the result of a mere inquiry about a claim. It is currently the burden of homeowners to figure out why they have been non-renewed or face a rate hike and it should be the responsibility of the insurer to disclose this information, according to FTCR.
“This is a simple consumer protection that keeps consumers in the loop on decisions made by their insurance company. It is like a truth in labeling law so a customer knows exactly what’s going on with their policy and to ensure that an insurance company is not using incorrect information at the expense of the consumer,” said Heller.
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