Trends in Home and Renter's Insurance

February 28, 2017

In 2012, the average home insurance premium increased by 5.6 percent, and that number increased by .4 percent in 2013 according to a study by the national Association of Insurance Commissioners. Renter's insurance increased by .5 percent in 2013. The state with the highest premium was Florida with an average exceeding $2,100. Idaho was ranked the lowest with an average premium just above $560. On a nationwide basis, the average premium was just shy of $1,100.

Main Insurance Losses
Of all insured homes in the United States, 5.3 percent had claims filed in 2014. In over 97 percent of the claims, property damage was cited. Theft was cited along with property damage in many instances. Changes in weather patterns play an important role in the amount of claims and the severity of damages. When the number of severe weather occurrences throughout the summer or winter increases, home insurance claims increase. The average amount of claims for every 100 policies or the total amount of damage from claims may be used to determine patterns with them.

Home Inventories
During the past decade, about 50 percent of homeowners said that they made inventories of their belongings as a way to help document losses. Homeowners in the South were the most likely to have inventories, and those who lived in the West and Northeast followed. Although the Midwest faces a large number of devastating tornadoes, snow storms and hail, this portion of the country was the least likely to use an inventory.

Claim Trends
Some types of claims are not very common but must be considered. For example, an entire home in Florida fell into an enormous sinkhole when it opened up recently. The majority of home insurance policies do not include sinkhole damages. Only two states currently provide coverage. While sinkholes of this size are rare, there are hundreds of smaller sinkholes that open up across the country every year. Sinkholes and other rare but present risks are continually under consideration by insurers.  

Injury Claims
About one out of every 16 people in the United States experienced an injury requiring medical attention. In 2014, there were 69,500 deaths from home injuries that were not intentional. Although home injuries are more common than public or workplace injuries, the rate of these occurrences has decreased over the past century by over 20 percent. However, unintentional deaths at home have risen over time due to more falls and instances of poisoning. 

Insurers look for new ways to help keep Americans safer and improve insurance coverage every year. Today, there are also several insurers offering high-risk policies to people who live on beaches, in flood zones and in other locations that are vulnerable to natural damages. To learn more about home insurance or renter's insurance, contact your insurance agent.

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