Oklahoma’s top insurance official is criticizing the findings of a federal report on home insurance coverage and severe weather fueled by climate change.
In December, the U.S. Senate Budget Committee released a report detailing major risks in the home insurance industry nationwide.
It concluded that climate change has fueled higher premiums and rates of policies not being renewed. The report also said Oklahoma ranks fifth among all 50 states for the largest increase of policies not being renewed in recent years.
However, Oklahoma Insurance Department Commissioner Glen Mulready told KWGS the report isn’t accurate.
“Only half of the companies they asked responded,” he said. “I just question the validity of the data and how much market share you’re capturing.”
Meagan McCollum, an associate professor of finance at the University of Tulsa, sees those same gaps.
“There were a couple of companies that are in the top 10 insurance providers in Oklahoma that they didn’t even request data from,” McCollum said.
Part of the reason for that, according to McCollum, is that the Senate report focused on coastal states like Florida, California and Louisiana, which are seeing an increasing number of climate-related threats to homeowners.
“There’s a lot of good information in the report,” she said, “but I don’t think it tells the whole story.”
The report authors acknowledge this. A press release stated the findings only cover about 65% of the national insurance market.
It also states that “comprehensive non-renewal data of this scope and magnitude has never been publicly available” until the Senate’s report.
Oklahoma homeowners who do not have a mortgage are not required to have property insurance, skewing the data further.
McCollum said a “large share” of Oklahoma homeowners do not have a mortgage on their home.
“Both Oklahoma City and Tulsa rank in the top 10 metros, according to the most recent census data, of homeowners that do not have a mortgage,” she said.
A competitive market?
Mulready said the state Insurance Department has been conducting its own data collection to compile a report on Oklahoma’s market, which won’t be released for several months.
Mulready champions “a competitive, free market” for Oklahoma’s insurers, eschewing regulation. Last year, The New York Times reported he's never denied a rate increase requested by a home insurance company.
“The good news is we don’t have companies leaving Oklahoma, like some states are seeing. California is a good example where they put some pretty restrictive things in place as far as rates go and they saw all the major insurance companies refuse to write any new homeowners’ business.”
There’s good reason why insurers may choose to keep a presence in Oklahoma: homeowners here, where insurance is less tightly regulated, could be making up for losses in California. In general, states that apply less regulation see higher premiums.
McCollum said Oklahoma’s home insurance market isn’t a shining example of competitiveness.
Oklahoma’s market is less than competitive,” she said. “I think it’s kind of middle-of-the-road compared to other states.”
McCollum said as of 2023, the top 10 home insurance companies in Oklahoma represented about 56% of the market share.
Climate risks
Mulready said the Senate Budget Committee has taken too much time focusing on hearings about climate change.
It’s been widely reported that climate change has fueled insurance rate hikes and cancellations across the country. The most recent federal agency to agree in writing is the U.S. Department of Treasury’s Federal Insurance Office (FIO).
In a report released Thursday, the office concurs that climate change is fueling rising costs and worsening availability. Mulready said the National Association of Insurance Commissioners had planned to submit their own data to the FIO, but chose not to, claiming the office has “chosen to just run with [the Senate’s] data.”
McCollum said things are likely to get wilder in the Sooner State.
“Oklahoma hasn’t faced some of the hard decisions that Florida, California, North Carolina [or] Louisiana have faced in their insurance markets yet,” McCollum said. “I say ‘yet’ because we probably will face those risks. The insurance markets believe there are new and more severe risks.”
