Tag Archives: Homeowners Insurance

The Cost Of A Dog Bite

When dogs bite homeowners insurers pay out an average of $33,230 per claim.

In fact, dog bites and other dog-related injuries accounted for more than one-third of all homeowners liability claim dollars paid out in 2016, costing in excess of $600 million, according to the Insurance Information Institute and State Farm.

The average cost per claim paid out by insurers actually decreased by more than 10 percent in 2016, but the average cost per claim nationally has risen more than 70 percent from 2003 to 2016 (see chart).

This is due to increased medical costs as well as the size of settlements, judgments and jury awards given to plaintiffs, the I.I.I. reports.

Costs vary widely by state.

The state with the highest average cost per claim was New York, at a whopping $55,671 per claim.

For more state-specific information, go to the I.I.I.’s interactive map.

National Dog Bite Prevention Week® (April 9-15, 2017), is an annual event designed to provide consumers with information on how to be responsible pet owners while increasing awareness of a serious public health issue.

Watch this I.I.I. video for tips on preventing dog bites:

Sinkholes and Insurance

It was hard to miss the recent Florida story of a sinkhole fatality. This tragic event made news headlines in part because  fatalities due to sinkholes are  such a rare occurrence.

The story also prompted questions about sinkholes and insurance coverage.

Over at Straight Talk, the Insuring Florida blog, a post by Lynne McChristian explains that Florida has a sinkhole law requiring every property insurer to provide coverage for “catastrophic ground cover collapse†.

This is defined as:

1. Abrupt collapse of the ground cover,
2. A depression in the ground cover clearly visible to the naked eye,
3. Structural damage to the insured building, including the foundation, and
4. The insured structure being condemned and ordered vacated by the governmental agency authorized to do so.

However, a separate  optional comprehensive sinkhole policy is needed to cover any other type of sinkhole damage.

Florida is one of only two states that require home insurers to offer sinkhole coverage. The other is Tennessee.  In other states most homeowners insurance policies exclude coverage for sinkhole damage.

The Insuring Florida blog has  further background info on sinkhole insurance here.

More  info on sinkhole claims  is in  the I.I.I. facts+stats on homeowners and renters insurance.

IRC: Rapid Rise in Homeowners Claim Costs

The cost of homeowners insurance claims has been rising rapidly due to increases in claim severity and frequency, and insurers face significant challenges in responding effectively and managing the volatility of catastrophe-related claims, according to a new study from the Insurance Research Council (IRC).

Consumers should also consider steps to control their personal exposure to risk and to mitigate the damages and costs associated with severe weather events, the IRC said.

The IRC study of homeowners insurance claims found that from 1997 to 2011, the average claim payment per insured home countrywide rose 173 percent, from $229 to $626. In 2011 alone, homeowners insurance claim costs per insured home increased 27 percent.

Over the entire 15-year study period, the annualized rate of increase was 7.4 percent.

The IRC examined separately claim trends for claims not related to catastrophic events and those that were related to catastrophic events.

It found that trends in average claim severity (the average claim payment per paid claim) for both groups were similar in some respects.

For both groups of claims, countrywide claim severity increased almost 200 percent and ended the 15-year period in 2011 with similar values—$8,077 for noncatastrophe-related claims and $7,553 for catastrophe-related claims.

Significantly, however, the trend in catastrophe-related claim severity was much more volatile from year-to-year, with dramatic increases and decreases over the study period.

With respect to trends in homeowners claim frequency (the number of paid claims per 100 insured homes), the IRC said these were very different for the two groups of claims over the study period.

The frequency of claims unrelated to catastrophic events fell substantially from 1997 to 2005. Since 2005, however, noncatastrophe-related claim frequency has increased at an annualized rate of 2.9 percent.

Catastrophe-related claim frequency, while much more volatile, remained fairly flat through much of the period.

The study also found that catastrophe-related claims played a significantly greater role in overall claim trends in the second half of the 15-year period. Catastrophe-related claims accounted for 25 percent of overall claim costs countrywide from 1997 to 2004, on average, but 29 percent of overall claim costs from 2004 to 2011.

Check out this PC360 article for more on this story.

Also take a look at I.I.I. facts+statistics on homeowners insurance.

Homeowners Insurance: Customer Satisfaction Increases

As 2012 appears to be continuing the trend of heavy thunderstorm losses (hail and tornadoes) seen in 2011, the just-released 2012 U.S. Property Claims Satisfaction Study from J.D. Power and Associates makes for a timely read.

The study, which measures customer claims experiences based on homeowners claims filed during 2011, found that overall satisfaction in 2012 improves to 833 on a 1,000-point scale, an increase of 10 points from last year’s study.

The improvement comes despite the record number of storm losses seen in 2011, when there were 99 weather-related disasters in the U.S., 14 of which totaled more than $1 billion in damages each, according to the Insurance Information Institute (I.I.I.).

In a press release, Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates, says:

A period of tremendous volatility in the industry, caused by a large number of devastating storms, led us to anticipate that satisfaction would decline, but that clearly was not the case.†

And:

The industry as a whole did well in not only handling the day-to-day claims, but also the large volume of claims associated with those major events.†

Other key takeaways from the study, include the fact that high wind claims, which include tornado and hurricane damage, accounted for 33 percent of all claims filed, an increase from 21 percent in last year’s study.

Yet, among those who filed a claim for high wind damage, satisfaction remained stable, relatively unchanged with last year.

Claims experience by region shows mixed results, however. For example, satisfaction in the South Atlantic and Northeast regions, both of which had increase in high wind claims due to hurricanes in 2011, improved 36 points and 18 points respectively on the prior year’s study.

In contrast, overall satisfaction the East North Central Region, which also had an increase in high wind claims due to tornado damage, satisfaction declined by 14 points. The West South Central region which saw an increase in hail-related claims also saw an eight-point drop in satisfaction year over year.

Not surprisingly, the study finds that a positive claims experience fosters significantly higher long-term loyalty among claimants, while a negative claims experience may cause claimants to be more likely to switch insurers.

Check out I.I.I. facts and statistics on homeowners insurance and tips on how to file a homeowners claim.