Today many consumers struggle to afford steeply increased premiums, while others find it difficult to obtain insurance in the private market altogether. Concerns are growing that many American homeowners are forced by financial realities to forego homeowners insurance, sometimes called “going bare.” But going bare puts consumers at risk of accruing significant financial debt to repair their homes, having to live with unsafe and inadequate housing conditions, or moving from homeowner to homeless after disaster strikes.

Based on an analysis of 2021 American Housing Survey data from the US Census Bureau,
this report finds that:

• One in thirteen homeowners across the United States are uninsured (7.4 percent),
equivalent to 6.1 million homeowners.

• Homeowners making under $50,000 a year are twice as likely as the general
population to be uninsured (15 percent).

• Homeowners of color are disproportionally at risk, with an estimated 22 percent
of Native American, 14 percent of Hispanic, and 11 percent of Black homeowners
having no homeowners insurance.

• Over one third (35 percent) of owners of manufactured homes, as well as 29 percent
of those who have inherited their homes, have no homeowners insurance.

• Homeowners living in rural areas and those living in the metropolitan areas of Miami
and Houston are most likely to not have homeowners insurance.

• Even with conservative estimates, an estimated $1.6 trillion in property value of
uninsured homes was at risk in 2021: this includes $339 billion of uninsured Hispanic owned homes and $206 billion of uninsured Black-owned homes.

We conclude by offering research and policy recommendations:

1. More data are needed to track insurance gaps and pre-existing and emerging
inequalities in insurance markets.

2. The precarity of the homeowners insurance market poses a systemic risk to our
nation’s housing markets. Fixing this will require both investing in risk reduction and
reducing insurers’ overreliance on unregulated reinsurance.

3. Unavailable and unaffordable homeowners insurance continue to impact the racial
wealth and homeownership gaps. We need more research that examines racial
discrimination in insurance markets

The post EXPOSED: A Report on 1.6 Trillion Dollars of Uninsured American Homes appeared first on Consumer Federation of America.

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Despite the oversupply, major firms continue to recruit new agents, often failing to provide sufficient training and mentorship. This results in a majority of agents selling few or no properties yearly and a prevalence of inexperienced agents in the market. The report suggests that this system persists due to factors like high agent turnover, new agents bringing in clients from their personal networks, and firms benefiting from fees paid by these agents. The lack of effective training and mentorship underscores the need for improved industry standards and consumer awareness when selecting agents.

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The report shows that it is much less demanding to earn a real estate sales license – which takes a state median of nine weeks at a state median cost of $600 – than earning a license to practice almost all other financial services occupations, which normally require a college degree as well as special training.  It is even easier to earn a real estate sales license than to practice many manual occupations, from plumbing to hairdressing, which usually require an apprenticeship of more than 1,000 hours as well as coursework.

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In this presentation to the Consumer Liaison Committee at the 2022 fall meeting of the National Association of Insurance Commissioners, Consumer Federation of America calls on insurance regulators to adopt the following telematics reforms:

1) Laws and bulletins requiring transparency in telematics

2) Strict standards for data collected and used by insurers

3) Transparency regarding the algorithms are that are used in these programs

4) Strong measures to protect consumer privacy, and testing to weed out unfair discrimination and racism.

The post Telematics in Insurance Presentation: National Association of Insurance Commissioners appeared first on Consumer Federation of America.

More stringent energy efficiency standards will benefit all consumers through energy bill savings. Survey results indicate high levels of public support for federal energy efficiency standards. Among all respondents, 76% said they support standards. Among different demographic subsets broken out by race, income, and homeownership status, support remained high, ranging from 72% to 82%. Support remains strong in response to questions about support for efficiency standards with different payback periods. The survey showed that 71% of respondents support standards within a three-year payback period and 64% within a five-year payback period. A majority of all respondents, 54%, support standards within a ten-year payback period.

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The report was based on a comparison of housing prices and buyer broker commission rates in 17,805 recent sales in 35 cities.

• In ten cities, the rates were so uniform that meaningful comparisons could not be made.
• In five cities, rates were fairly similar for all housing price categories.
• In eight cities, higher-priced homes tended to carry higher commission rates than did lower-priced homes.
• In only eight cities did higher-priced homes tend to carry lower commission rates.

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• In each of 10 cities, at least 87 percent of the home sales had identical commission rates.
• In each of 18 cities, at least 70 percent of the sales had identical commission rates.
• In each of 24 cities, at least 88 percent of the sales had commission rates between 2.5 and 3.0 percent.

The post Real Estate Commission Rates in 35 Cities: Uniformity and Variability appeared first on Consumer Federation of America.

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