Concerned that property insurance has become increasingly difficult and more expensive to obtain, the politically powerful National Association of Realtors has formed a task force to look into the issue.

Because insurance is regulated at the state level, the task force will focus on serving as an information and strategy clearinghouse so state and local associations can address the problem. But if lower-level solutions prove futile, the 840,000-member group plans to step in with both feet at the national level in the nation's capital.

"We have a growing insurance crisis in this country," outgoing President Martin Edwards said at the group's annual convention in New Orleans last month.

Noting that insurance is a necessary component in obtaining a mortgage and is critical to the well-being of the nation's efforts to increase home ownership, Edwards said the problem "may be something Congress should be looking at."

NAR is the nation's largest trade association. But real estate brokers and agents aren't the only ones who are complaining, though. So are affordable-housing advocates.

At the convention, Lynn King of the National Community Reinvestment Coalition implored NAR to put forth the same energy it used to block banks from entering the real estate market into protecting home buyers and owners from insurance companies that use credit scores to deny coverage or increase rates.

Arguing that scoring is the latest form of redlining and is used as a guise so insurers don't have to cover low- and moderate-income homeowners, King said her 700-member group is "very, very troubled" by the increased use of the technique in the insurance field.

King, the coalition's director of legislative and regulatory affairs, told an NAR Public Policy Political Forum that 92 percent of all carriers now use scoring but refuse to "lift the veil of secrecy" about how scores are calculated. A low score can make the difference in whether someone will be able to obtain coverage and complete the purchase of his home.

Others, however, are complaining that the problem goes far beyond the affordable-housing arena. "There is not a state where we don't have insurance issues," said Jeanette Way of Gateway Realty, Vacaville, Calif., a member of NAR's Federal Housing Policy Committee.

But Donald Griffin of the National Association of Independent Insurers defended insurance scores, saying actuaries believe the practice is now "the No. 1 predictor" of homeowner insurance losses.

At the same time, though, Griffin said that the industry hasn't done as good a job as it should in proving the connection between scores and claims. "I'm not sure we've adequately proved the correlation," he said. "We're trying to do that now."

But Birny Birnbaum, executive director of the Center for Economic Justice, also blasted the use of scoring, saying all the concerns that have been raised about mortgage scoring apply to insurance scoring "and then some."

"It's lunacy" that the most important factor in who gets insurance and how much they pay is now someone's credit score, he said. "This is an insurance product, not some intangible."

Published: December 4, 2002

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When Lew Sichelman first started writing about housing in 1969, he was the youngest real estate writer in the country. Now, 37 years later, he's one of the oldest -- and most decorated. He has been rated the top housing columnist in the country by the National Association of Realtors as well as by his peers in the National Association of Real Estate Editors. Indeed, NAREE has recognized his work on numerous occasions. One year - due to his advancing age, he can't recall which one - he earned top honors in the annual NAREE Journalism Contest in three out of the four major writing categories. It was the first time one writer has won so many NAREE awards in a single year. Known for his ability to make even the most difficult topics understandable, Sichelman also has been honored by the National Association of Home Builders and the Mortgage Bankers Association. He began providing in-depth coverage of and consumer-oriented information about housing and housing finance at the Washington Daily News, where he was real estate editor. He held that same position for nine more years at the Washington Star, which purchased the News in 1972. The Star, a so-called "writer's newspaper" which also had the misfortune of being an evening paper, was put out of its misery in 1981, and Sichelman, who had begun self-syndicating his column in 1978, decided to become a full-time columnist. Today, his column, "The Housing Scene," is distributed by United Media to newspapers throughout the country. He also is on the staff of National Mortgage News, an independent newspaper which is considered the bible of the mortgage business. And he writes for numerous other publications, including MarketWatch.com, where he answers readers questions once a week, Sports Illustrated (don't ask), RealtyTimes.com, BigBuilder and others. Sichelman is married, the father of five and grandfather of eleven.