Improving State Regulation of Homeowners Insurance : The Essential Protections for Policyholders Project

Homeowners insurance provides financial security for 70 million American households and stability to the communities in which they live — but only when it works. Homeowners insurance only works because it is supported and regulated by state law. This article describes the Essential Protections for Policyholders project, which aims to make state regulation and therefore homeowners insurance itself work better. As a project of the Rutgers Center for Risk and Responsibility at Rutgers Law School in cooperation with United Policyholders, Essential Protections for Policyholders draws on academic research, an extensive survey of state law, and practical experience.The Essential Protections for Policyholders project addresses market conduct regulation, focusing on key elements of the relationship between insurance companies and their policyholders. It aims to improve the market for insurance, to address deficiencies in the market, and to provide effective means of validating the insurance relation in case of loss.In each area, the project identifies a series of general principles that motivate the particular analysis and recommendations. Then the principles are given more detail in recommendations about the direction state regulation should take. In most cases, recommended statutory language is included. The recommendations are based on a discussion of the issue and a survey of current law. A unique feature of the project is that it rests on an extensive national database of state law regulating homeowners insurance. The database of law in the fifty-one jurisdictions also provides a basis for comparing and evaluating individual states' current systems of regulation. Part of the project is to prepare scorecards comparing states' homeowners protections on a variety of issues