What Happened
In a press release published August 25, New York Senators James Skoufis, Jamaal Bailey, and Brian Kavanagh announced a joint investigation into residential property insurance. The purpose of the investigation is “to identify the causes of reported increases in premiums and other obstacles to insuring new and existing single- and multi-family homes, including those occupied by homeowners and renters, and to identify legislation and policy changes that New York State should implement.”
The Details
Three committees are participating in this investigation: the Committee on Investigations and Government Operations, chaired by Skoufis; the Committee on Insurance, chaired by Bailey; and the Committee on Housing, Construction, and Community Development, chaired by Kavanagh (together, the committees). Skoufis and Bailey have previously contributed to insurance-related legislation — including Bills 2025-S7265 (creating incentives for residential extreme weather resiliency), 2025-S7264 (establishing a tax-advantaged savings account for residential insurance and recovery expenses due to an extreme weather event), 2025-S5321 (relating to the approval process for insurer filings), and 2025-S8066 (relating to residential insurance required by lenders). Each senator cited various concerns that motivate this investigation, including concerns that New York residents may be subsidizing insurance losses in other states, questions regarding the health of the industry and recent rise in premiums, and a desire to “understand how insurance market dynamics, extreme weather, and other factors are affecting insurance costs and accessibility.”
So far, the committees have requested information from various residential insurers, government agencies, industry associations, and trade groups. The senators have indicated that they expect this investigation to last through the fall and that they intend to seek input from affected stakeholders and experts on extreme weather and climate change. The committees will likely hold a joint hearing to further examine the issue. At the end of the investigation, the lawmakers intend to issue a report on the investigation’s findings and resulting proposals.
Why It Matters
This investigation follows heightened focus on property insurance nationwide. Recent extreme weather events, such as the wildfires in California, have highlighted rising costs of residential property insurance, concerns over stability in the industry, and the impact of insurers of last resort. New York has also experienced costly extreme weather events, such as Superstorm Sandy, along with recent hurricanes on the East Coast, and flooding in Texas. At the federal level, the Senate held two recent hearings examining many of the issues the New York legislators are now investigating. In addition to extreme weather, industry experts cite inflationary pressures on construction costs and home prices as significant factors in increasing property insurance costs.
The committees requested documents and information from a variety of entities, including insurers, trade groups, and agencies, emphasizing the complexity and far-reaching impact of residential property insurance. Because each type of entity may have access to different types of information, the committees will likely receive a wide range of responses to create a comprehensive picture of this issue. For entities that have or will receive requests for documents, legislative investigations present stakeholders with an opportunity to inform policymakers of industry challenges and participate in the ongoing conversation on important policy issues. Due to the unique nature of these investigations, Troutman recommends that the recipients of such requests seek legal counsel to understand their obligations and best practices.
