As it has every year since Heartland began the report card, Florida gets the worst possible grade. Under the guise of the Florida Citizens Property Insurance Corporation, the state has largely taken over the property insurance market and maintains a regulatory system that has resulted in high rates and a retreat of well known, well capitalized private carriers. The enormous size of both Citizens and the state-run reinsurer, the Hurricane Catastrophe Fund, leaves taxpayers with a multi-billion liability. Not all the news is bad, though. In the last few years, long-serving Insurance Commissioner Kevin McCarty—still a bête noire to much of the insurance industry—has become a cautious advocate for reform. Even with Gov. Charlie Crist out of office, however, legislators have blocked almost all significant market-freeing proposals.

California's politically driven auto insurance system, restrictions on the use of credit scoring, and surprisingly uncompetitive homeowners' insurance market (given its size) bring its scores down. Carriers also complain about the often arbitrary nature of the state's insurance regulations.

Despite its libertarian cowboy self-image, Texas has chosen a big government course for everything related to P&C insurance. The Texas Department of Insurance administers a file-and-use law as if it were prior approval, arbitrarily denies rate filings, and has tended to restrict market entry. Furthermore, the state's residual wind insurance market has grown at an alarming rate. As a result, the state has a very concentrated market that leaves consumers in many areas with few choices of carriers.

Hawaii is infamous and particularly unpopular in the insurance industry for its restrictive ratings practices and lack of choice for consumers. As with Alaska, however, geographic remoteness may drive down its score.

Although it scores near the bottom of our ratings, Massachusetts has undergone a number of positive changes in recent years as a result of former Insurance Commissioner Nonnie Burns and Gov. Deval Patrick. The state's still-too-large residual markets, attorney General Martha Coakley's persistent insurance-related politics, and burdensome laws on the books, however, drive down its score.

New York's big, sophisticated insurance department offers a repository of expertise that no other can match and has some fans amongst big insurers that get to know its ins and outs. But a combination of heavy politics, too-large residual markets, and heavy-handed regulation make New York a poor place for a smaller insurers and insurance consumers.

Michigan's unusual "pure no-fault" auto insurance system has a lot of advantages on paper, but in recent years a combination of politics (particularly under former Gov. Jennifer Granholm and her insurance commissioners), anger, and economic decline has made it a difficult place to buy insurance. Partly as a result of burdensome regulations, a single car policy in the state's largest city of Detroit tops $5,000 a year.

The ratings may be a little bit unfair to Alaska. Because of its remoteness and enormous size, the state doesn't attract many insurers. Outside of its cities, in fact, finding anyone to write coverage can sometimes be a hardship. The state's regulatory system, although not terribly burdensome, still offers more hurdles than most.

Tennessee's regulatory system doesn't get many complaints from insurers, but the lack of choice of carriers—a few large, out-of-state enterprises dominate the state—make it a bad place to shop for insurance.

Colorado's combination of territorial rating restrictions, a prior approval rate filing system, and a moderately concentrated market land it in the bottom 10.

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