Insurance Affordability: Three East Coast Regulators Weigh In

For many East Coast homeowners, the difficulty lies not in finding insurance, but paying for it. And that so-called affordability problem affects nearly every state along the coastline.

Given their recent history with hurricanes, Gulf Coast states like Florida and Louisiana tend to dominate discussions over increasing problems with availability of coastal property insurance. But even in states less known for their hurricane activity, affordability – as opposed to availability — problems remains a major topic of discussion for homeowners, insurers and regulators.

Recently, Insurance Journal sat down with top regulators of Maine, Maryland and Connecticut to see how the affordability problem was playing out in their states.

Insuring Lower-Risk Coastlines

Maine, for instance, despite the threat of Hurricane Kyle last month, has not had a hurricane make landfall since 1991. Still, coastal exposures and rising home prices along the coast have made affordability an issue for Mainers living along the coast.

“We have companies that are willing and do offer coverage along the coast,” said Mila Kofman, commissioner of insurance for Maine. “We don’t have the availability problems that some states have. But in some ways, we have an affordability problem. As property values have gone up along the coast, so has the price of coverage. So that is a concern and I am working with some insurance companies to find a way that they can offer more affordable insurance products along the coast.”

In Maryland, the problem is far more severe, said Insurance Commissioner Ralph Tyler.

“Like in many costal states, homeowners insurance has been an issue,” he said. “We had one major carrier pull out of the market, and we had a major legislative effort last year which led to the adoption of some coastal reform legislation. There is availability, but the cost the coast is high. The broader question is to make sure the price that is being given is fair given the actual risk.”

It’s a system, he added, where “the people who live along the coast need to understand those risks and the people who do not live on the cost should not be subsidizing those risks.”

In Connecticut, said Insurance Commissioner Thomas Sullivan, affordability can be a challenge, but the availability of coverage is high, thanks to the regulatory environment in the state.

“It’s an efficient, highly competitive marketplace, which is good for consumers,” Sullivan said. “I have over 100 underwriters of personal lines homeowners insurance coverage in the state of Connecticut, which I think is a testament to… the regulatory environment that allows for competition. We haven’t strictly regulated our companies from the standpoint of rates and forms. Don’t get me wrong, we look at everything that comes in… but we do so with a pillow-covered hammer, if you will. We make sure that the market performs and responds to the market’s need.”

These interviews are available at