The causes of rising Homeowners insurance premiums in New York are mostly self-inflicted, Big I New York told a state Senate panel Tuesday.
The remarks came at a day-long special hearing on affordability issues in the state’s residential property insurance market. Members of the Senate’s standing committees on Insurance; Investigations and Government Operations; and Housing, Construction, and Community Development heard testimony from many different perspectives inside and outside the industry.
The hearing stemmed from an investigation the three committees launched last summer into the causes of availability and affordability problems. The committees sent questionnaires to carriers and trade groups, including Big I New York. We hand-delivered our responses to Senate Insurance Committee Chair Jamaal Bailey (D – Bronx, Westchester).
In submitted written testimony, Big I New York President and CEO Lisa Lounsbury told the senators, “Over decades, state laws and regulations have created one of the most expensive insurance environments in the country." She cited the state’s so-called “scaffold law" (Labor Law Sections 240(1) and 241(6)) as one example of a law “driving up costs for every homeowner, taxpayer, contractor and business owner."
She also argued that third-party litigation funding and abuse of the state’s legal system are “fueling a ‘lawsuit culture’ that increases settlements and defense costs." Other states, she noted, have taken steps to improve their legal climates, resulting in more insurance competition.
Delays at the New York State Department of Financial Services (DFS) that slow consideration of carrier rate and form filings inhibit carriers’ ability to respond to market changes, she added. One study showed that the median length of time to get a filing approved in New York has nearly tripled since 2020, making it the second slowest state in the country.
Appearing on behalf of Lounsbury, who was unable to attend the hearing, Assistant Vice-President of Government Relations Travis Wattie spoke of the challenges Big I New York members and their employees are having finding affordable coverage for their customers. He cited conversations with members who point to improvements in other states and ask why that isn’t happening in New York. He also echoed Lounsbury’s statement about delays at DFS, noting that members hear from their carriers that there are “brand new fancy products in 49 states but not in New York."
The joint committee is expected to produce a report with recommendations for new legislation over the next few months. We will report here on those developments as they occur.