PIA Position on Auto and Homeowners’ Insurance
Last night, at a CNN Town Hall, President Biden commented on the cost of homeowners’ and automobile insurance. In response, PIA would like to contextualize the president’s remarks with facts about the way auto and homeowners’ insurance policies are priced and the role of states and professional independent insurance agents in that process.
Insurance companies base their prices on, among other considerations, the risks posed by individual consumers, and the evaluation of risk is based on numerous factors. Race is not used as a factor in pricing because every state prohibits that sort of racial discrimination. Those existing state laws make it illegal for companies to price products in racially discriminatory ways. In every state in America, insurers are prohibited from pricing their products based on race.
Professional independent insurance agents work with their clients and insurance companies every day to provide policyholders with the best available price for the most comprehensive available coverage. Indeed, professional independent insurance agents only succeed when their clients are satisfied with the products and services their agents have sold them. Moreover, policyholders value the local expertise of professional independent insurance agents, who know the regional market for their products and can appropriately evaluate the risk a policyholder poses.
PIA is a champion of state legislative and regulatory oversight of insurance. Professional independent insurance agent expertise is enhanced by the state-based regulatory system, and that expertise would be undercut by federal legislative or regulatory intervention. The federal government has never been and is not now the appropriate place to address this issue. In keeping with longstanding practice, any changes to insurance pricing oversight should be made by state legislatures and departments of insurance.