When I joined the Consumer Federation of America in spring 2020, I quickly plunged into the complex and fast-changing world of auto and homeowners insurance markets, learning quickly about gaps in consumer protection and the many ways we needed to stand up for consumer rights. The problems that have come into focus include extraordinary premium increases, unfair pricing strategies, insurance companies turning their backs on communities, and the burden of government and lender mandates to purchase insurance on low- and moderate-income Americans.  

 With that in mind, it is helpful to take a step back and look at the broader insurance landscape over the past five years: what have been the overall trends? What are the issues that consumers currently face?  

 Below are some of the key issues that I think consumers (and public officials) should be aware of: 

1. Rising auto insurance costs and big profit announcements highlight a major problem: governments require consumers to buy this product, but state lawmakers and regulators don’t do enough to keep it affordable. Every state except New Hampshire requires drivers to purchase auto insurance, so states have a responsibility to make sure the coverage is affordable and consumers don’t experience unfair discrimination. But most state insurance regulators have not done enough to challenge insurance companies as they jack up prices well beyond the rate of inflation. They don’t reject excessive premium increases, they don’t aggressively fight unfair discrimination in insurance, and they don’t hold insurance companies accountable for unfairly delaying and denying claims. Some insurance departments put resources and expertise toward consumer protection, but many regulators have far too cozy a relationship with the insurance industry—often at the expense of consumers. Still other regulators take a hands-off approach to regulation, which leaves consumers without the help they need to stand up to insurance companies.  
2. Insurance companies charge consumers more for auto insurance based on socioeconomic factors that have little or nothing to do with driving. The companies use a consumer’s job title, education level, ZIP code or neighborhood, gender, marital status, homeownership status, and credit score to charge higher premiums, even if they have a perfect driving record. The Consumer Federation of America’s 2023 report found that consumers with poor credit scores pay on average 115% more, or over twice as much, for auto insurance compared to consumers with excellent credit. The socioeconomic penalties insurers are allowed to use add up, costing drivers hundreds or even thousands of dollars more in premiums. A consumer can pay one penalty because of their blue-collar job, another penalty because they didn’t go to college, a third penalty because they are single, another if they are female, and the final and largest penalty because of their credit score.  
3. Rising homeowners insurance costs make insurance expensive or even unaffordable for many consumers. Our recent report on rising insurance costs found that from 2021 to 2024, American homeowners saw their premiums increase by $648, or 24% on average—a $21 billion price hike, well above the rate of inflation. Premiums went up in 95% of ZIP codes. As a result, many homeowners are struggling to afford insurance or even going without coverage altogether, leaving them on the hook for all the costs if their home is damaged or destroyed. As with auto insurance, CFA research has also shown that homeowners with poor credit scores pay about double the price for the same coverage sold to someone with excellent credit. 
4. Mitigation efforts to reduce homeowners insurance can help, but they must be adequately funded; moreover, insurers must be required to pass along discounts to consumers. By strengthening their roofs against hurricanes, building their decks out of fire resistant materials, and taking other loss prevention measures, consumers can reduce their insurance risk and should lower their premiums, though companies are rarely required to reflect these risk reduction investments in the premiums they charge. Because these home hardening improvements are costly, many people, especially those living paycheck to paycheck, cannot afford them. Some states have created programs that offer grants to homeowners, often around $10,000, to strengthen their homes and lower their risk. The grant programs are excellent, but they need adequate funding so that vulnerable homeowners can get that help. Additionally, if consumers undertake these measures, insurance companies should be required to pass along premium discounts or rate reductions to consumers. One lesson we’ve learned in recent years is that you can’t trust insurance companies to return savings to customers without oversight.  
5. Climate change is a major driver of rising insurance costs, and companies should stop funding fossil fuel projects that make the situation worse. Stronger and more frequent natural disasters are contributing to higher insurance costs, in the form of more devastating hurricanes, larger wildfires and a longer wildfire season, a widening of “tornado alley” and more severe storms in the middle of the country, and other catastrophic events. Yet insurance companies continue to underwrite fossil fuel projects like oil pipelines and coal-fired power plants that contribute to climate change—and increase insurance prices. They also invest billions of dollars in the fossil fuel sector, profiting off a key source of climate change while down streaming the cost of increased risk to its policyholders through higher premiums and shabbier policies.   
6. Consumers, consumer advocates, and policymakers are paying increased attention to insurance. Higher insurance premiums, insurance company misbehavior, and company withdrawals have brought a lot of attention to the insurance market, creating a spotlight that provides consumer advocates an opportunity to press for badly needed reforms that will improve the current situation.  

 Consumers face huge problems in getting affordable and available insurance policies. But the Consumer Federation of America is fighting every day to make insurance more affordable and stop unfair discrimination. As the Lorax says, “Unless someone like you cares a whole awful lot, nothing is going to get better. It’s not!”  

 To get involved, or to simply learn more, email us at mdelong@consumerfed.org.