Property and Casualty Insurance Report Card

A Heartland Institute State-by-State Analysis of Regulatory Burden

Full Document Available in PDF

According to Barron’s, the U.S. dominates the world in providing property and casualty (P&C) insurance with 43.4 percent of worldwide P&C premiums. Japan is next with only 10.3 percent, and Germany third with 8.8 percent. Approximately 3,000 P&C insurance and reinsurance companies in the U.S. employ approximately 635,000 workers.

Unfortunately, the way insurance is regulated in the U.S. distorts insurance products, raises their price, and limits their availability. Insurance regulation threatens to weaken or undermine one of the institutional pillars supporting free enterprise and economic prosperity.

The Heartland Institute and Competitive Enterprise Institute embarked on this project in an effort to draw attention to the things that make some states good places for insurers and consumers and other states bad places for them. A focus on “good” and “bad” state laws, we hope, should serve to draw attention to the places most in need of attention and reform.

This report card 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 automobile insurance, and nearly all mortgage lenders require that their clients secure homeowners coverage.

Most consumers (about 60 percent) buy their homeowners and automobile insurance policies from the same company. Nearly all companies that write homeowners insurance also write automobile insurance, and most auto insurers also write homeowners insurance. With a few exceptions—which our ratings consider—states regulate both types of insurance using the same (often identical) processes.

Our ranking focuses on two key questions:

1) How free are consumers to decide what insurance products will meet their needs?

2) How free are insurers to provide products that meet consumers’ real or perceived needs?