Property and Casualty Insurance: Where Does Your State Rank?

March 17, 2008
Harriette Johnson

A new state-by-state analysis reveals how some states' heavy-handed regulation of insurance markets makes homeowners' insurance less available, less useful, and more expensive.

(Chicago, Illinois - March 17, 2008) Consumers in five states are paying higher premiums for homeowners insurance than necessary thanks to ill-advised regulation, according to a new report card jointly released by The Heartland Institute and Competitive Enterprise Institute.

Consumers in California, Florida, Maryland, Massachusetts, and North Carolina pay more for homeowners coverage that is inferior to states with positive insurance climates.

Homeowners in Idaho, Illinois, Utah, Vermont, and Wisconsin enjoy lower premiums for broader and more predictable coverage, and earned "A" grades on the Heartland/CEI report card.

"On balance," writes Eli Lehrer, the report's author, "states with less-regulated insurance markets provide more consumer choice, more predictable rates, and insurance premiums that better reflect actual risk than do states with heavily regulated markets."

The Property & Casualty Insurance Report focuses on homeowners and automobile insurance, the two types of insurance Americans typically are required to purchase. State laws in 46 states mandate the purchase of auto insurance, and nearly all mortgage lenders require their clients to secure homeowners coverage.

The report rates states using nine variables, key among them the size of the state's residual market, loss ratio stability, rate regulation, and territorial rating.

Vermont achieved the report card's highest raw score, with a total of 27 points. "Although not typically known for its free-market policies," noted Lehrer, "the state has become a hotbed of insurance innovation." The remaining A-graded states earned raw scores between 13 (Wisconsin) and 23 (Idaho).

Massachusetts received the worst raw score, with -67 points. "Although its score will improve thanks to the end of state-created rates for automobile insurers, the state still has much work to do," Lehrer writes. The remaining F-graded states earned raw scores between -35 (Texas) and -45 (North Carolina).

In addition to the main state-by-state analysis, the report includes case studies offering more detailed descriptions of the insurance environments in five states: Florida, Illinois, Louisiana, Texas, and Vermont.

Property & Casualty Insurance Report is available for free online at The printed report is available for $10 by calling The Heartland Institute at 312/377-4000.

Editors: Report author Eli Lehrer, a senior fellow with the Competitive Enterprise Institute and Heartland Institute, is available for comment on this study. To communicate with him, contact Harriette Johnson, Heartland's media relations manager, at 312/377-4000 or by email at

The Heartland Institute is a 24-year-old national nonprofit organization based in Chicago, Illinois. The Competitive Enterprise Institute, also founded in 1984, is headquartered in Washington, DC. Both are tax-exempt under Section 501(c)3 of the Internal Revenue Code. Nothing in this news release or the report it describes is intended to influence the passage of pending legislation.