Developing a Homeowners Insurance Policy Comparison Tool—RU InsureScore

Homeowners need easily understandable information about insurance policies in order to evaluate their current coverage and to shop effectively for insurance. But insurance is the only product for which consumers don’t know what they are buying before they buy it. Insurance companies almost never provide copies of policy language or complete summaries of policy terms to prospective policyholders, and most state insurance regulators don’t require insurers to make policies readily available.Even if consumers had access to policies, most of them wouldn’t read or couldn’t understand the long, complex, legal documents, or be able to anticipate the many ways in which a loss might occur or the problems that may result if it does.Yet homeowners insurance policies vary widely among companies in what things and risks they cover—and don’t cover—and what they pay for losses. Therefore, there is a need for an accessible way for homeowners to evaluate and compare homeowners insurance policies. RU InsureScore, a project of the Rutgers Center for Risk and Responsibility at Rutgers Law School, begins to fill that need. RU InsureScore compares homeowners insurance policies of major national insurers.Each company’s policy is given a numerical score on a 100-point scale and an overall rating on a five-star scale. The overall scores are accompanied by brief comments, categorizing the policy (as “excellent”, “very good”, “good”, or “adequate”) and sometimes adding a brief note on limitations.In addition to the overall score, each company’s policy is rated on a five-star scale on the three Property Insurance categories (Things the insurance covers, Risks the insurance covers, What the insurance pays) and Liability Insurance. The entry for each company includes all of its ratings and comments under “Pros” and “Things to watch for.”This paper describes the development and contents RU InsureScore, including methodology, presentation, aims, and recommendations for future action by state insurance regulators