Massachusetts
attorney general appeals home insurance premium hike Attorney General
Tom Reilly has appealed a state-approved premium hike that would boost significantly
the price of the Bay State's home insurance policy of the last resort, an increase
that would hit Cape customers the hardest.
In an appeal filed Friday with
the Supreme Judicial Court, Reilly contends state officials approved new rates
for the so-called FAIR Plan without adequate data analysis.
The rate hike,
which was requested last year by FAIR Plan administrators, would boost rates on
the Cape and Islands by 25 percent. The rate increase would raise the current
average premium for Cape customers from about $1,300 to $1,625.
Reilly, who is running for governor, yesterday called the premium
hike "absolutely devastating to people on the Cape and Islands," and
he called for public hearings on whether such premium increases are justifiable.
"Every
time we have looked behind the insurance industry's proposals, we have found mischief
or that they have been in error," Reilly said. "That goes for everything
from car insurance to workman's compensation. And we believe that same thing is
happening here."
The new rates, which would go into effect for renewals
starting Oct. 1, come as more and more insurers are deciding to take their business
off the Cape.
Driven by increased projections for hurricane damage in the
region, numerous insurers have bailed on the region and left thousands of Cape
homeowners with no choice but the FAIR Plan. Those insurers that still offer Cape
policies have limited their share of the market and raised their rates by as much
as 70 percent. As a result, the FAIR Plan has become the largest property insurer
on the Cape and Islands, with 43,000 policies.
That is about one-third of
the region's market.
State officials last month approved a FAIR Plan increase
that would boost rates statewide by an average of 12.4 percent statewide -- and
about 25 percent on the Cape and Islands.
