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Industry and consumer groups offer different fixes: trade associations cite reinsurance and claims costs; advocates and a risk scholar propose regulation and a
Summary
Trade associations and insurers described climate, inflation and reinsurance pressures driving rates; consumer advocates urged stronger consumer protections and data transparency; a University of Maryland risk scholar proposed a federal government‑sponsored hazard insurer to address market failure.
Industry representatives and consumer advocates presented contrasting views on causes and remedies for homeowners insurance changes at the House Environment and Transportation Committee briefing.
Matt Overturf, assistant vice president for state affairs at the National Association of Mutual Insurance Companies (NAMIC), said insurers face a "new era of risk" driven by extreme weather, inflation in materials and labor, litigation trends and rising reinsurance costs. "For year end 2023, the combined ratio for homeowners insurance for all carriers in the United States was a 110.9," he said, explaining that insurers are paying out more in claims and expenses than they receive in premium in many cases.
Bryson Popham of the Maryland Association of Mutual Insurance Companies (MAMIC) and Christopher Roberts, a product manager for Farmers of Salem, described steep, company‑specific loss experience and said reinsurance and localized loss patterns have forced rate filings. Roberts said his company’s indicated rate need rose from 56 percent in a 2023 filing to about 70 percent after 2023’s loss experience, and that claims totals for a recent five‑year window rose substantially.
Industry witnesses emphasized the role of catastrophe models and reinsurers’ pricing in determining capacity for coastal and concentrated risks, and urged mitigation and modern building codes as ways to lower long‑term losses.
Consumer Federation of America housing director Sharon Cornelison presented research showing households are sensitive to premium increases: CFA’s analysis of purchased industry data found a typical Maryland homeowner saw an 18.4 percent premium increase between 2021 and 2024 and was paying about $1,716 annually in 2024 for the modeled coverage. Cornelison said MFA and federal data commissioned by CFA showed a Maryland‑wide five‑year averaged loss ratio around 58 percent — a figure she said raises questions about pricing fairness and warrants more transparency from insurers.
Dr. Rossi, director of the Smith Enterprise Risk Consortium at the University of Maryland, proposed a longer‑term federal approach: a government‑sponsored enterprise to assume and transfer catastrophic hazard risk nationwide, akin to how the housing GSEs manage credit risk. He said the corporation would underwrite catastrophic perils, issue tranches of risk to private capital and provide a deeper market for reinsurable catastrophic exposure, with the goal of stabilizing availability and affordability.
Committee members asked industry witnesses about drones, use of credit scoring in underwriting, and whether requiring HO‑6 unit owner coverage for condos could push risk into surplus lines. Industry witnesses acknowledged drone use in some underwriting and said credit scoring has been restricted for homeowners pricing in Maryland in prior years; MIA staff confirmed the homeowner-side credit factor was eliminated years ago. The industry and regulator urged improved data sharing and mitigation programs as priorities.
No committee votes were taken. Witnesses said further study, data transparency and stakeholder engagement will be necessary to shape legislative or regulatory remedies.
