Homeowners Insurance
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Homeowners Insurance Expenditures
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AVERAGE PREMIUMS FOR HOMEOWNERS AND RENTERS INSURANCE, UNITED STATES,
1999-2005
| - A 2006 Insurance Research Council poll found that 96 percent of homeowners had homeowners insurance while 43 percent of renters had renters insurance.
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AVERAGE PREMIUMS FOR HOMEOWNERS AND RENTERS INSURANCE, BY STATE, 2005
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THE TOP TEN MOST EXPENSIVE AND LEAST EXPENSIVE
STATES FOR HOMEOWNERS INSURANCE, 2005
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LEADING WRITERS OF HOMEOWNERS INSURANCE
BY DIRECT PREMIUMS WRITTEN, 2006
($000)
Rank |
Company/Group |
Direct premiums written (1) |
Market share |
| 1 | State Farm Mutual Group | $13,580,291 | 22.2% |
| 2 | Allstate Insurance Group | 7,309,829 | 11.9 |
| 3 | Zurich Insurance Group | 4,280,574 | 7.0 |
| 4 | Nationwide Group | 2,853,602 | 4.7 |
| 5 | Travelers Group | 2,660,259 | 4.3 |
| 6 | USAA Group | 2,504,863 | 4.1 |
| 7 | Liberty Mutual Insurance Group | 1,889,463 | 3.1 |
| 8 | Chubb & Son Group | 1,745,025 | 2.9 |
| 9 | American Family Insurance Group | 1,431,085 | 2.3 |
| 10 | Hartford Fire & Casualty Group | 1,047,858 | 1.7 |
| (1) Before reinsurance transactions, excluding state funds.
Source: National Association of Insurance Commissioners (NAIC) Annual Statement Database, via Highline Data, LLC. Copyrighted information. No portion of this work may be copied or redistributed without the express written permission of Highline Data, LLC. |
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WHERE THE PREMIUM DOLLAR GOES, HOMEOWNERS INSURANCE, 2006
| - In 2006 claims accounted for $58 of every $100 of homeowners insurance premiums earned, down from $75 in 2005.
- Property damage and theft claims accounted for 81 percent of all claims payments. Liability claims accounted for 5 percent. The cost of settling these claims accounted for the remaining 14 percent of total claim costs.
- Expenses—including commissions, general overhead expenses, state premium taxes, licenses and fees—accounted for $31 of every $100 of premium earned.
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CAUSES OF HOMEOWNERS INSURANCE LOSSES
In 2006, about 5 percent of insured homes had a claim, according to ISO. About 94 percent of those claims were for property damage, including theft. Changes in the percentage of each type of homeowners loss from one year to another are partially influenced by large fluctuations in the number and severity of weather-related events such as hurricanes and winter storms. There are two ways of looking at losses: by the average number of claims filed per 100 policies (frequency) and by the average amount paid for each claim (severity). The loss category “water damage and freezing” includes damage caused by mold. Every state except Arkansas, New York, North Carolina and Virginia has adopted an ISO mold limitation for homeowners insurance coverage, which allows insurers to exclude the coverage unless the condition results from a covered peril.
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HOMEOWNERS INSURANCE LOSSES BY CAUSE, 2002-2006 (1)
(Percent of losses incurred)
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HOMEOWNERS INSURANCE LOSSES, 2002-2006 (1)
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Water damage and freezing |
Total homeowner losses |
Year |
Claim frequency (2) |
Claim severity (3) |
Claim frequency (2) |
Claim severity (3) |
| 2002 | 1.64 | $4,159 | 6.79 | $4,671 |
| 2003 | 1.78 | 4,631 | 7.00 | 5,342 |
| 2004 | 1.61 | 5,249 | 6.51 | 8,028 |
| 2005 | 1.40 | 5,524 | 5.52 | 8,379 |
| 2006 | 1.24 | 5,743 | 5.09 | 6,901 |
| Average (4) | 1.53 | 5,023 | 6.15 | 6,602 |
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(1) For homeowners multiple peril policies. Excludes tenants and condominium policies.
(2) Claims per 100 house years (policies).
(3) Accident year incurred losses, excluding loss adjustment expenses, i.e., indemnity costs per accident year incurred claims.
(4) Weighted average.
Source: ISO. |
| - Incurred homeowners losses decreased by 32.1 percent from $41.8 billion in 2005 to $28.4 billion in 2006, on a direct basis before reinsurance, according to the National Association of Insurance Commissioners.
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