Facts + Statistics: Homeowners and renters insurance

 

Homeowners insurance expenditures

The average homeowners insurance premium rose by 3.6 percent in 2015, following a 3.3 percent increase in 2014, according to a January 2018 study by the National Association of Insurance Commissioners, the latest data available. The average renters insurance premium fell 1.1 percent in 2015 after rising 1.1 percent in 2014. Florida had the highest average homeowners insurance premium in 2015 ($1,993) and Oregon had the lowest ($643). The countrywide average homeowners insurance premium was $1,173 in 2015. (See tables in Expenditures for homeowners and renters insurance section).

 

Causes of homeowners insurance losses

In 2017, 6 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.

 

Home inventories

On average, over the past nine years about half 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 (I.I.I.). Fifty-two percent of homeowners said they had an inventory in a June 2015 I.I.I. survey. The survey showed that homeowners in the South were more likely to have a home inventory (57 percent), followed by homeowners in the Northeast and West (56 percent and 50 percent, respectively). Only 43 percent of homeowners in the Midwest said they had an inventory.

 

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).

 

Homeowners Losses Ranked By Claims Severity (Average Claim), 2013-2017 (1)

(Weighted average, 2013-2017)

ho_loss_rank_by_claim_sev_aver_claim_13-17.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 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

 

Homeowners Losses Ranked By Claims Frequency, 2013-2017 (1)

(Weighted average, 2013-2017)

ho_loss_rank_by_claim_freq_13-17.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

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 50 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 325 insured homes has a property damage claim due to theft each year.
• About one in 360 insured homes has a property damage claim related to fire and lightning.
• 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 2013-2017 (see table above).

 

Consumer prices

The Bureau of Labor Statistics collects the prices of a fixed “basket” of consumer goods and services every month to compile the consumer price index. The price of all types of insurance is heavily influenced by the cost of goods and services paid by insurers to meet.

 

Expenditures homeowners and renters insurance

The average homeowners insurance premium rose by 1.6 percent in 2017, following a 1.6 percent increase in 2016, according to a November 2019 study by the National Association of Insurance Commissioners, the latest data available. The average renters insurance premium fell 2.7 percent in 2017 after falling 1.6 percent in 2016 and 1.1 percent in 2015.

 

Home injuries

In 2017, 25.3 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 90,200 deaths from unintentional home injuries in 2017. The overall death rate has remained almost unchanged over the past 100 years, falling to 27.7 deaths per 100,000 people in 2017 from 28 deaths per 100,000 people in 1912. However, the number and rate of unintentional home injury deaths has increased by 156 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, 2017   prin_typ_of_home_uninten_inj_deaths_17.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

A myriad of different programs in place across the United States provide insurance to high risk policyholders who may have difficulty obtaining coverage from the standard market. So called residual, shared or involuntary market programs make basic insurance coverage more readily available. Today, property insurance from 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 Citizens Property Insurance Company (CPIC) and Louisiana Citizens Property Insurance Corporation (Louisiana Citizens). 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, while Beach and Windstorm Plans cover predominantly wind-only risks in designated coastal areas. Hybrid plans like Florida and Louisiana’s CPIC, provide property insurance throughout those states. It is important to note that in addition to windstorm risk, these plans routinely cover a range of other exposures, such as vandalism and fire.

 

Renters and homeowners demographics

In 2014, 63.1 percent of housing units were owner occupied and 36.9 percent were renter occupied, according to the latest U.S. Census figures. In 2013, 29 percent of owner-occupied units housed people age 65 and over. The same year, 14 percent of rental units housed people over age 65.

The nation's homeowners with a mortgage paid a median of $1,454 in monthly housing costs in 2014, compared with $934 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, 48 percent compared with 31 percent of homeowners who spent 30 percent or more of their income on housing costs.