Facts + Statistics: Homeowners and renters insurance

 

Homeowners insurance expenditures

The average homeowners insurance premium rose by 3.1 percent in 2018, following a 1.6 percent increase in 2017, according to a January 2021 study by the National Association of Insurance Commissioners, the latest data available. The average renters insurance premium fell 0.6 percent in 2018 marking the fourth consecutive annual decline. Renters insurance premiums fell 2.7 percent in 2017. (See tables in Expenditures for homeowners and renters insurance section).

 

Home inventories

On average, over nine survey years ending in 2020, 49 percent of homeowners said they prepared an inventory of their possessions to help document losses for their insurers, according to polls conducted for the Insurance Information Institute (Triple-I). Forty-three percent of homeowners said they had an inventory in the 2020 Triple-I Consumer Poll. The survey showed that homeowners in the South and West were more likely to have a home inventory (48 percent and 41 percent), followed by homeowners in the Northeast and Midwest (both regions at 39 percent).

 

Sinkhole claims

In March 2013 an entire house fell into a huge sinkhole in a suburb of Tampa, Florida, garnering national attention. Although such large, sudden and destructive sinkholes are relatively rare, thousands of small sinkholes appear in the U.S. each year. The most damage from sinkholes occurs in Florida, Texas, Alabama, Missouri, Kentucky, Tennessee and Pennsylvania, according to the U.S. Geological Survey. Most homeowners insurance policies exclude coverage for sinkhole damage. However, homeowners insurance companies in Florida and Tennessee are required to offer the coverage. In Florida catastrophic ground cover collapse is mandatory; comprehensive sinkhole coverage is optional. (Note: For information on the Florida law see http://www.insuringflorida.org/articles/sinkholes.html. For statistics on Florida sinkholes see http://www.floir.com/sections/pandc/sinkholepage.aspx).

 

Causes of homeowners insurance losses

In 2018, 5.7 percent of insured homes had a claim, according to ISO. Property damage, including theft, accounted for 98.1 percent of those claims. 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, if covered. Every state except Alaska, 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.

Homeowners Insurance Claims Frequency*

• Homeowners claims related to wind or hail are the most frequent; the costliest are related to fire and lightning.
• About one in 20 insured homes has a claim each year.
• About one in 40 insured homes has a property damage claim related to wind or hail each year.
• About one in 50 insured homes has a property damage claim caused by water damage or freezing each year.
• About one in 350 insured homes has a property damage claim related to fire and lightning.
• About one in 400 insured homes has a property damage claim due to theft each year.
• About one in 900 homeowners policies has a liability claim related to the cost of lawsuits for bodily injury or property damage that the policyholder or family members cause to others.

*Insurance Information Institute calculations, based on ISO®, a Verisk Analytics® business, data for homeowners insurance claims from 2014-2018 (see table above).

 

Homeowners Losses Ranked By Claims Severity (Average Claim), 2014-2018 (1)

(Weighted average, 2014-2018)

ho_loss_rank_by_claim_sev_aver_claim_14-18.gif

(1) For homeowners multiple peril policies (HO-2, HO-3, HO-5 and HE-7 for North Carolina). Excludes tenants and condominium owners policies. Accident year incurred losses, excluding loss adjustment expenses, i.e., indemnity costs per accident year incurred claims. Excludes Alaska,Texas and Puerto Rico.
(2) Includes coverage for unauthorized use of various cards, forgery, counterfeit money and losses not otherwise classified.
(3) Includes vandalism and malicious mischief.

Source: ISO®, a Verisk Analytics® business.

View Archived Graphs

 

Homeowners Losses Ranked By Claims Frequency, 2014-2018 (1)

(Weighted average, 2014-2018)

ho_loss_rank_by_claim_freq_14-18.gif

(1) Claims per 100 house years (policies). For homeowners multiple peril policies (HO-2, HO-3, HO-5 and HE-7 for North Carolina). Excludes tenants and condominium owners policies. Excludes Alaska,Texas and Puerto Rico.
(2) Includes vandalism and malicious mischief.
(3) Includes coverage for unauthorized use of various cards, forgery, counterfeit money and losses not otherwise classified.

Source: ISO®, a Verisk Analytics® business.

View Archived Graphs

 

Consumer prices

The Bureau of Labor Statistics consumer price index (CPI) tracks changes in the prices paid by consumers for a representative basket of goods and services. The cost of living (all items) rose 1.2 percent in 2020. The cost of motor vehicle insurance declined significantly, down 4.6 percent, as insurers nationwide returned over $14 billion to their customers in response to reduced driving during the Covid-19 pandemic. The cost of tenants and household insurance declined slightly, down 0.5. percent. Hospital services rose faster than overall inflation, up 4.2 percent, and total medical care rose 4.1 percent.

 

Expenditures for homeowners and renters insurance

The average homeowners insurance premium rose by 3.1 percent in 2018, following a 1.6 percent increase in 2017, according to a January 2021 study by the National Association of Insurance Commissioners, the latest data available. The average renters insurance premium fell 0.6 percent in 2018 marking the fourth consecutive annual decline. Renters insurance premiums fell 2.7 percent in 2017.

 

Home injuries

In 2018, 25 million Americans experienced an unintentional injury in the home that required aid from a medical professional, according to an analysis by the National Safety Council (NSC). Injuries requiring medical attention occur more often at home than in public places, the workplace and motor vehicle crashes combined, according to the NSC. There were 89,300 deaths from unintentional home injuries in 2018, down 1.4 percent from 2017. The overall death rate has remained almost unchanged over the past 100 years, at 27.3 deaths per 100,000 people in 2018 from 28 deaths per 100,000 people in 1912. However, the number of unintentional home injury deaths has increased by 150 percent since 1999, largely due to increases in unintentional poisonings and falls. Drug overdoses are largely responsible for the poisoning deaths and there has been an increase in older adult falls.

Principal Types Of Home Unintentional Injury Deaths, 2018   prin_typ_of_home_uninten_inj_deaths_18.gif (1) Inhalation and ingestion of food or other object that obstructs breathing. Source: National Safety Council estimates based on data from National Center for Health Statistics and state vital statistics departments. View Archived Graphs

Falls are the leading cause of hospital-treated unintentional injuries, according to the Home Safety Council.

 

High-risk markets

Myriad programs in place across the United States provide insurance to owners of property in high-risk areas who may have difficulty obtaining coverage from the standard market. Residual, shared or involuntary market programs make basic insurance coverage more readily available. Today, property insurance for the residual market is provided by Fair Access to Insurance Requirements (FAIR) plans, beach and windstorm plans, and two state-run insurance companies in Florida and Louisiana: Florida’s Citizens Property Insurance Corp. and Louisiana’s Citizens Property Insurance Corp. Established in the late 1960s to ensure the continued provision of insurance in urban areas, FAIR plans often provide property insurance in both urban and coastal areas. Beach and windstorm plans cover predominantly wind-only risks in designated coastal areas. Over the past four decades FAIR and beach and windstorm plans experienced explosive growth both in the number of policies and in exposure value. However, the number of policies in FAIR plans peaked in 2011 and has been falling steadily. The total number of policies fell 48.5 percent from 2011 to 2019, while exposure dropped by 51.0 percent.

 

Renters and homeowners demographics

In 2019, 64.6 percent of housing units were owner occupied and 35.4 percent were renter occupied, according to the latest U.S. Census figures. In 2019, 32.1 percent of owner-occupied units housed people age 65 and over. The same year, 16.2 percent of rental units housed people over age 65.

The nation's homeowners paid a median of $1,510 monthly housing costs in 2019, compared with $1,301 for renters, according to the latest American Housing Survey from the Census.

However, renters usually paid a higher percentage of their household income on these costs than did owners, 45.1 percent compared with 26.5 percent of homeowners who spent 30 percent or more of their income on housing costs in 2019.