The House Financial Services Subcommittee on Housing and Insurance held a hearing on November 2, 2023, entitled “The Factors Influencing the High Cost of Insurance for Consumers.”
A hearing of this kind was largely anticipated in response to the rapidly rising insurance premiums across the nation’s housing market and the significant negative impacts such increases have had on all stakeholders, including rental housing owners, operators and renters. Of focus in the hearing:
- Republicans expressed concern about the overreach of the Federal Insurance Office within the U.S. Department of Treasury and emphasized how insurance should continue to be regulated at the state level. Members of Congress also highlighted the importance of risk-based pricing, noting that some states have regulatory structures or programs that worsen insurance affordability for consumers.
- Democrats continue to focus on the impacts of climate change as it relates to insurance and how property and casualty insurers are leaving states that are most affected by increasingly frequent natural disasters. Members also highlighted that insurance is becoming increasingly unaffordable for affordable housing providers and nonprofits. Democrats also emphasized the importance of reauthorizing the National Flood Insurance Program, as it provides critical protection for property owners, renters and businesses.
The National Apartment Association (NAA) submitted a statement for the record with the National Multifamily Housing Council (NMHC), speaking directly to the topics raised during the hearing. Ultimately, NAA and NMHC’s primary objective is to be sure that all housing providers can meet long-term housing needs for the millions of Americans who live in apartment homes and continue to foster the growing contributions that rental housing makes for our economy, which currently stands at $3.4 trillion annually. The volatility in the insurance market over recent years hinders the ability of housing providers to increase the nation’s housing supply.
To stabilize the insurance market, it will require partnership between policymakers and private sector stakeholders from real estate and insurance to advance solutions that improve climate resilience and sustainability and allow for properly functioning insurance and reinsurance markets to protect our nation’s rental housing stock and the broader economy. NAA continues to work with Congress to alleviate the pressures from skyrocketing insurance costs on housing affordability nationwide.
Witness appearing before the Subcommittee included: Robert Gordon, Senior Vice President, American Property and Casualty Insurance Association (APCIA); Frank Nutter, President, Reinsurance Association of America (RAA); Grace Arnold, Commissioner, Minnesota Department of Commerce, on behalf of National Association of Insurance Commissioners (NAIC); Joseph Petrelli, President and Co-Founder, Demotech, Inc.; Baird Webel, Specialist in Financial Economics, Congressional Research Service (CRS); and Sharon Lewis, Executive Director, Connecticut Coalition for Environmental Justice.