PCI Says Homeowners Insurance Availability Not a Problem in Oregon

The Oregon Division of Insurance should refrain from imposing underwriting or rating restrictions on companies writing homeowners insurance in the state, according to the Property Casualty Insurers Association of America (PCI).

Speaking on behalf of the insurance industry, Sam Sorich, PCI’s vice president and Western region manager, told a Division-sponsored forum in Portland that competition is alive and well in Oregon’s homeowners market.

“Customers have plenty of choices when they shop for homeowners insurance in the state,” Sorich said. “There are 138 companies competing for business, and that competition has resulted in Oregon enjoying the fourth lowest homeowners insurance premiums in the country.

“This healthy competition has kept insurers’ profits at a modest level. According to the National Association of Insurance Commissioners (NAIC), Oregon homeowners insurance companies had an overall profit level of 1.6 percent of premium for 2002, the latest year for which data is available. In Oregon, and around the nation, losses related to homeowners insurance have been increasing. For example, national figures show that homeowners insurers paid out $77 in claims costs for every $100 in premiums in 2000. In 2001, claims costs rose to $89 for every $100 collected in premiums. Even though homeowners premiums have gone up in the last year or two, insurers still paid out more than $77 in claims costs for every $100 in premiums again in 2002.

“Our recommendation to the Division of Insurance is to continue to foster competition. We caution against imposing underwriting and rating restrictions that would force insurers to use prices that do not reflect the risk of loss. As long as insurers are allowed to make pricing decisions that are based on the best available actuarial analysis, consumers will have the assurance that the price they pay for homeowners insurance is fair and competitively priced.”