Category Archives: Homeowners Insurance

NICB: Top 5 states for hail claims

The National Insurance Crime Bureau (NICB) recently released a three-year analysis of insurance claims associated with hail storms in the United States.  According to the NICB review of claims data from ISO ClaimSearch®, there were a total of 2.9 million hail loss claims in the United States from 2016 through 2018.

The top five states for hail loss claims were:

  • Texas (811,381)
  • Colorado (395,025)
  • Nebraska (163,336)
  • Missouri (153,403)
  • Kansas (146,206).

The top five cities for hail loss claims during that period were:

  • San Antonio, Texas (75,187)
  • Colorado Springs, Colorado (67,920)
  • Omaha, Nebraska (52,803)
  • Denver, Colorado (48,357)
  • Plano, Texas (42,659).

Over the three years covered by the report, May had the highest monthly average for hail loss claims with 203,296. June was next with 178,881. April (164,232), March (153,716) and July (96,947) round out the top five.

Of the five policy types providing hail loss coverage, Personal Property-Homeowners was the most affected with 1,657,663 claims or 57 percent of the three-year total. It was followed by Personal Auto with 898, 500 claims and Personal Property – Farm with 149,215 claims.

“Hail damage fluctuates year-to-year, but what seems to be consistent is the number of unscrupulous contractors ready to swoop in promising a quick fix, which is why NICB encourages policyholders to use caution when selecting a contractor or other workers to help repair your property or replace your windshield following a storm,” said Brooke Kelley, NICB vice president of communications. “Always check first with your insurance company or agent before signing any documents presented by a contractor whom you did not request to appear. It’s why we say, “If you didn’t request it, reject it.”

The following tips are also helpful:

  • Get more than one estimate
  • Don’t be pushed into signing a contract right away
  • Get everything in writing
  • Require references and check them out
  • Ask to see the contractor’s driver’s license and write down the number and the license plate on his or her vehicle

The I.I.I. has facts & statistics about hail here and here.

 

Earthquakes: More links from Insurance Information Instititute

We posted this look at insurance coverage and earthquakes earlier today. More important links about earthquakes and insurance:

 

What a Shocker: Florida Tops the List for Lightning Claims

By Loretta L. Worters, Vice President – Media Relations, Insurance Information Institute

Authorities believe a lightning strike caused a home to go up in flames in the Riverview area of Florida on Friday, June 14, ironically just days before Lightning Safety Awareness Week (June 23-29) commenced.

Often referred to as the lightning capital of the nation, it is no revelation that Florida ranked first for lightning caused homeowners insurance claims in 2018, with 7,108 claims, followed by Georgia (5,539) and California (4,909), a new addition to the line-up. Texas, which had ranked second in 2016, fell to fourth place (4,559).

The number of lightning-caused homeowners insurance claims decreased in 2018—the third straight year it has done so—yet the average cost per claim has soared since 2016.  The I.I.I. findings, based on national insurance claims numbers, determined that more than $900 million in lightning claims were paid out in 2018 to nearly 78,000 policyholders.  The cumulative value of claims caused by lightning rose six percent between 2016-2018.

With increased labor and construction costs as well as a consumer appetite for smart home products, it’s not surprising that lightning-related homeowners insurance claims costs have risen.  The average cost per claim rose eight percent from 2017 to 2018. However, the average cost per claim between 2016 and 2018 increased 21 percent – a veritable bolt from the blue!

 

Are impact-resistant roof shingles all they’re cracked up to be? The IBHS is on the case

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By Jennifer Ha, Head of Editorial and Publications, Insurance Information Institute 

Hail damage is a growing problem in large regions of the United States and causes about $1 billion in damage to crops and property each year, according to the National Oceanic Atmospheric Administration (NOAA). As such, after years of field and lab research, the Insurance Institute for Business Home and Safety (IBHS) has recently released the results of its first hail impact performance program—the IBHS Impact Resistance Test Protocol for Asphalt Shingles—designed to track impact-resistant roofing products and to demonstrate the IBHS performance standard for impact-resistant shingles.

To test its standard, IBHS bought the most widely purchased impact-resistant shingles available to consumers and tested them in its lab under simulated real-world conditions, which it has now published on its website. The site includes disclosures, test standards and Member-only data.

Florida has passed AOB reform – but will it be enough?

As we noted a few weeks ago, the Florida Senate has passed a bill designed to reform parts of the state’s insurance assignment of benefits (AOB) system. Governor Ron DeSantis has stated that he plans to sign the bill into law. (You can view the Senate version of the bill, SB 122, here).

Florida’s AOB system has long been in dire need of reform.

As we document in our report “Florida’s assignment of benefits crisis”, an assignment of benefits (AOB) is a contract that allows a third party – a contractor, a medical provider, an auto repair shop – to bill an insurance company directly for repairs or other services done for the policyholder.

The process is innocuous and common throughout the country. But as our report notes, Florida’s unique legal system richly rewards plaintiff’s attorneys and vendors when they submit inflated bills to insurance companies and then file lawsuits when those bills are disputed. Tens of thousands of lawsuits.

Reform only addresses property insurance

The new AOB bill is designed to curtail at least some of this abuse by addressing how AOBs can be executed and how plaintiff’s attorneys can be compensated. But it’s important to note that the bill addresses AOBs in property insurance.

For good reason: AOB abuse has been a growing problem in homeowners property insurance.

Other lines also face AOB abuse

However, AOB abuse is not limited to property insurance. As we document in our report, the abuse actually started in personal injury protection (PIP) claims in personal auto insurance and then spread to homeowners following PIP reform in 2012. The abuse also spread into auto glass coverage in the past few years, though there was a decrease in auto glass abuse in 2018.

The lesson here is that AOB abuse is not limited to one line of insurance. Indeed, reforms could push abuse into a different line, as was the case with homeowners and auto glass after PIP was reformed.

While reforming AOBs in property insurance could have a significant impact on the problem in Florida, it remains to be seen whether abuse overall will change with reform. Some have argued that the abuse could continue in other lines where the reform doesn’t reach, like auto glass. And perhaps it could move into another line that hasn’t even been abused yet, like businessowners insurance. There are also worries that abusive AOB claims could spike right before the reform comes into effect.

For more information about the scope of the problem, download our report here.

Florida legislature passes AOB reform

Insurance Journal reports that the Florida Senate has passed a bill designed to reform parts of the state’s insurance assignment of benefits (AOB) system. Governor Ron DeSantis has stated that he plans to sign the bill into law.

Florida’s AOB system has long been in dire need of reform.

As we document in our report “Florida’s assignment of benefits crisis”, an assignment of benefits (AOB) is a contract that allows a third party – a contractor, a medical provider, an auto repair shop – to bill an insurance company directly for repairs or other services done for the policyholder.

The process is innocuous and common throughout the country. But as our report notes, Florida’s unique legal systems richly rewards plaintiff’s attorneys and vendors when they submit inflated bills to insurance companies and then file lawsuits when those bills are disputed.

Not just a few lawsuits. Lots of lawsuits. The numbers are staggering. There were roughly 1,300 AOB lawsuits statewide in 2000. There were more than 79,000 in 2013 and more than 153,000 in 2018, a 94 percent increase in just five years.

Inflated claims and massive volumes of lawsuits have the predictable result of driving up insurance companies’ legal costs. Insurers are forced to then pass those costs on to consumers. In the study, we estimate that Florida’s auto and homeowners policyholders have paid about $2.5 billion more for insurance over the past dozen years to cover the increase in legal costs.

That doesn’t even count the billions more in excess claim settlements that are at the heart of the problem.

The new bill seeks to address the problem by reforming how AOBs can be executed and how plaintiff’s attorneys can get paid for lawsuit settlements. If signed, the bill will come into effect on July 1, 2019.

You can download our report documenting the crisis here.

Avoid a Double Tragedy: Tips from National Dog Bite Prevention Week® Coalition Partners

Janet Ruiz

Our previous post discussed homeowners liability claims stemming from dog bites. Today, Janet Ruiz, I.I.I.’s Director of Strategic Communications, has these valuable safety tips from National Dog Bite Prevention
Week
® Coalition partners.

The American Veterinary Medical Association (AVMA) estimates there are approximately 78 million dogs in U.S. homes and each year 4.5 million people are bitten or injured. “Even the gentlest dog can bite if they are in pain, feel threatened, or are competing for resources such as food or space,” said Dr. John de Jong, AVMA President. “Not only is it important to understand how dogs behave, it is important to understand how a dog may interpret our behavior.” AVMA’s ‘Jimmy the Dog’ video series lets preschoolers look at how a dog might interpret different scenarios.

“We’ve seen firsthand over the years the tragic consequences surrounding dog bites and their effect on those involved – the people who are injured, the animals who may be relinquished or even destroyed, and the dog’s owners who have to cope with the loss of a beloved family member,” said Lesa Staubus, DVM, American Humane Rescue veterinarian, “Once your dog has bitten someone – or you or a family member fall victim to a dog bite – it will be already be too late.  Let’s practice good prevention instead.”

Because of the high-risk involving dogs, babies, and children, American Humane offers a free online booklet called Pet Meets Baby that provides families with valuable information on introducing a new child to a home with a dog.

Additional safety tips from American Humane include:

  • NEVER leave a baby or small child alone with a dog, even if it is a family pet. Children are often bitten by dogs in their own household.
  • Make sure your pet is socialized so it feels at ease around people and other animals.
  • Walk and exercise your dog on a leash to keep it healthy and provide mental stimulation.
  • Regular veterinary visits are essential to regulating the health of your dog. A sick or injured dog is more likely to bite.
  • Be alert. If someone approaches you and your dog, caution them to wait before petting the dog. Give your pet time to be comfortable with the stranger.
  • Understand and respond to changes in your dogs’ body language. Look at the eyes, ears, tail, and posture to know when your dog may be happy, fearful, or angry.

Dog Bite Liability Claims by State – Interactive Map

Getty Images

Dogs provide millions of people with companionship, happiness and health benefits. But even dogs that are normally docile may bite when they are frightened or when defending their puppies, owners or food.

To educate pet owners about how to prevent dog bites The American Veterinary Medical Association (AVMA), the Insurance Information Institute,  State Farm®, and others have joined together for National Dog Bite Prevention Week (April 7 -13).

Homeowners insurers paid out $675 million in liability claims related to dog bites and other dog-related injuries in 2018, according to the Insurance Information Institute (I.I.I.) and State Farm®, the largest writer of homeowners insurance in the United States.

California had the largest number of claims in 2018 followed by Florida. California also had the highest average cost per claim at $45,543.

For more details see our interactive map below.

 

Put a smoke alarm checkup on your spring cleaning list

istock.com

By Lynne McChristian, I.I.I. Non-resident Scholar and Media Spokesperson

Ah, spring! The season of renewal, of fresh beginnings, of flowers in bloom – and of fresh batteries in the smoke alarm. Yes, you probably overlooked that last item, so here’s a reminder to put it on the spring to-do list.

Checking (and changing) the batteries in the smoke alarm is a good springtime habit. Most homes have a smoke alarm, but if you don’t check it with regularity,  you can’t be sure it’s working. It is one of those out-of-sight, out-of-mind things, so here’s a reminder to put your home or business smoke alarm top of mind.

According to the National Fire Protection Association (NFPA), almost three of every five home fire deaths resulted from fires in homes with no smoke alarms or in homes where the smoke alarm was not working. NFPA also points to missing or disconnected batteries as the reason for inoperable smoke alarms. Dead batteries cause 25 percent of smoke alarm failures.

That chirping sound you hear at night? It’s not the first robin of spring. It’s the smoke alarm battery alerting you that it’s time for a change. And, if your smoke alarm is more than 10 years old, replace the entire alarm. It’s inexpensive protection that is worth every cent.

Most insurance companies offer discounts for smoke alarms, particularly monitored systems. After you check the batteries and/or upgrade your smoke alarm, check with your insurer on any possible discount. It might be a small amount, but the alarm itself is big protection – for every season.