National Association of Insurance Commissioners Issues Report Entitled 'Dwelling, Fire, Homeowners Owner-Occupied and Homeowners Tenant and Condominium/Cooperative Unit Owner's Insurance Report: Data for 2019'

WASHINGTON, June 11 (TNSrep) -- The National Association of Insurance Commissioners issued a 196-page report entitled "Dwelling, Fire, Homeowners Owner-Occupied, and Homeowners Tenant and Condominium/Cooperative Unit Owner's Insurance Report: Data for 2019".

Here are excerpts:

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Table of Contents

Purpose of Report...1

Data...1

Limitations on the Data...2

Residual Market Data ...3

Policy Forms/Types...3

Analysis of the Data...4

Factors Affecting the Cost of Insurance...8

Geographic Area, Real Estate and Construction Costs...8

Catastrophe Exposure...8

Mold Damage...12

Terrorism...12

Other Variables...13

Summary...14

Table 1: 2019 House-Years by State and Countrywide by Policy Type...15

Table 2: 2019 House-Years by State and Countrywide by Policy Form...19

Table 3: 2019 House-Years by State and Countrywide by Amount of Insurance...23

Table 4: 2019 Average Premium by Policy Form by Amount of Insurance

Dwelling Fire and Homeowners Owner-Occupied Policy Forms...31

Table 5: 2019 Average Premium by Policy Form by Amount of Insurance

Homeowners Tenants and Condominium/Cooperative Unit Policy Forms...137

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Purpose of Report

This report provides countrywide and state-specific premium and exposure information for non-commercial dwelling fire insurance and for homeowners insurance package policies. Homeowners package policy data are for the homeowners owner-occupied policy forms (HO-1, HO-2, HO-3, HO-5 and HO-8), the tenant policy (HO-4) and the condominium/cooperative unit owner's policy (HO-6). This narrative describes the data and discusses the way economic, demographic and natural phenomena impact the price of homeowners insurance.

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Analysis of the Data

Table 1 provides exposure data in house-years by policy type. The table shows a countrywide total of 90,414,613.4 house-years. In 2019, homeowners owner-occupied policy exposures accounted for 71.3 percent of overall exposures countrywide. Tenant and condominium policy exposures accounted for 27.1 percent of the total, while dwelling fire exposures made up the remaining 1.6 percent.

Exposure data for the eight individual policy forms is provided in Table 2. The HO-3 accounted for 55.4 percent of all policy exposures and remains the most common policy sold by far. Figure 1 (next page) shows the percentage breakdown of exposures for the homeowners owner-occupied policy forms only. Countrywide, 77.7 percent of these exposures were written on the HO-3 form.

Figure 2 shows the percentage breakdown of countrywide exposures for the tenant and condo/co-op policy forms. Of these, 73.9 percent were written on the HO-4 form.

Figure omitted

Tables 3A and 3B present countrywide and by-state exposure data divided between each of the ranges of insurance coverage amount. Dwelling fire policy data and data for the homeowners owner-occupied policy forms are grouped together in Table 3A, and data for the HO-4 and HO-6 forms are grouped together in Table 3B. Countrywide, in 2019, 57.3 percent of dwelling fire and homeowners owner-occupied policies were written for insurance coverage amounts between $50,000 and $300,000.

Tenant and condominium policies do not provide coverage for the building; therefore, the distribution of exposures for these types of policies is concentrated at significantly lower insurance amounts. Table 3B shows that 67.1 percent of the exposures for the HO-4 and HO-6 forms are concentrated at amounts below $32,000, and 89.4 percent of these policies provide less than $75,000 in coverage.

Figure 3 provides a comparison of dwelling fire and the five homeowners owner-occupied policy exposures by amounts of insurance coverage. Dwelling fire exposures represent 2.2 percent of total exposures and are most prevalent at insurance coverage amounts less than $50,000. In the less than $50,000 range, dwelling fire exposures account for 51.1 percent of the total, then drop to 32.9 percent at insurance amounts of $50,000-$74,999. At coverage amounts above $75,000, dwelling fire exposures account for no more than 15.0 percent of the total for each range.

Figure 4 compares HO-4 and HO-6 policy forms by coverage amounts. Countrywide, the HO-4 (tenants) form represents more policies written at lower coverage amounts. At coverage amounts above $44,000, the majority of exposures are written on the HO-6 (condo/co-op) form.

Tables 44 and 5 display state average premiums for each policy form. Examining the countrywide average premium data for dwelling fire and homeowners owner-occupied policies reveals some expected results. In general, the average premium increases as the amount of coverage increases for all policy types. Dwelling fire premiums are generally lower when compared to the five homeowners premiums, reflecting the more limited coverage offered by dwelling fire policies compared to homeowners packages.

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The report is posted at: https://content.naic.org/sites/default/files/publication-hmr-zu-homeowners-report.pdf

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