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Dwelling Fire, Homeowners Owner-Occupied, and Homeowners Tenant and Condominium/Cooperative Unit Owners Insurance: Data for 2013

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Dwelling Fire, Homeowners Owner-Occupied, and Homeowners Tenant and Condominium/Cooperative Unit Owners Insurance: Data for 2013 Dwelling Fire, Homeowners Owner-Occupied, and Homeowners Tenant and Condominium/Cooperative Unit Owners Insurance: Data for 2013 Market Distribution and Average Cost by Policy Form and Amount of Insurance 2013 Dwelling Fire, Homeowners Owner-Occupied, and Homeowners Tenant and Condominium/Cooperative Unit Owner’s Insurance January 2016 The NAIC is the authoritative source for insurance industry information. Our expert solutions support the efforts of regulators, insurers and researchers by providing detailed and comprehensive insurance information. 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NAIC Executive Offi ce NAIC Central Offi ce NAIC Capital Markets 444 North Capitol Street, NW 1100 Walnut Street & Investment Analysis Offi ce Suite 700 Suite 1500 One New York Plaza, Suite 4210 Washington, DC 20001 Kansas City, MO 64106 New York, NY 10004 202.471.3990 816.842.3600 212.398.9000 Note: Information which is copyrighted by and proprietary to Insurance Services Office, Inc. (ISO Material) is included in this publication. Use of the ISO Material is limited to ISO Participating Insurers and their Authorized Representatives. Use by ISO Participating Insurers is limited to use in those jurisdictions for which the insurer has an appropriate participation with ISO. Use of the ISO Material by Authorized Representatives is limited to use solely on behalf of one or more ISO Participating Insurers. Dwelling Fire, Homeowners Owner-Occupied, and Homeowners Tenant and Condominium/Cooperative Unit Owners Insurance: Data for 2013 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 Defective Drywall ............................................................................................................. 12 Mold Damage .................................................................................................................... 12 Terrorism ........................................................................................................................... 13 Other Variables .................................................................................................................. 13 Summary ............................................................................................................................ 14 Table 1: 2013 House-Years by State and Countrywide by Policy Type ................................. 15 Table 2: 2013 House-Years by State and Countrywide by Policy Form ................................ 19 Table 3: 2013 House-Years by State and Countrywide by Amount of Insurance .................. 23 Table 4: 2013 Average Premium by Policy Form by Amount of Insurance Dwelling Fire and Homeowners Owner-Occupied Policy Forms ............................ 31 Table 5: 2013 Average Premium by Policy Form by Amount of Insurance Homeowners Tenants and Condominium/Cooperative Unit Policy Forms ............ 137 © 2016 National Association of Insurance Commissioners © 2016 National Association of Insurance Commissioners Dwelling Fire, Homeowners Owner-Occupied, and Homeowners Tenant and Condominium/Cooperative Unit Owners Insurance: Data for 2013 Market Distribution and Average Cost by Policy Form and Amount of Insurance 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. Data Data consist of written exposures, expressed as house-years,1 and aggregate written premiums by state and countrywide for the 2013 data year. Premium and exposure information was collected for all states and the District of Columbia. The data are displayed in five tables. Three tables show individual state and countrywide exposures grouped by 1) policy type; 2) individual policy form; and 3) amount of insurance coverage, divided into ranges, with percentages of total exposures provided. The last two tables display by-state and countrywide average premiums. Average premiums are calculated by dividing premiums by exposures for each policy form and range of insurance coverage, and represent the cost of a year of coverage. Percentages of totals are provided. Policy forms included in the report are described in detail in the following section. The ranges of insurance amounts extend to higher levels of coverage for the dwelling fire and homeowners owner-occupied policy forms than those for the tenant and condominium insurance, because premiums for the latter two policy forms do not include coverage for the residential structure. To the extent that data are reported to statistical agents, data for statutorily established FAIR plans are included. This report is not comprehensive of all statistical agents as there may be smaller statistical agents that do not report data to the NAIC. The data is limited to what was provided by the following companies, whose cooperation and assistance in compiling this report is greatly appreciated: • Data for all states, except Texas and California, were provided by the American Association of Insurance Services; ISO Data, Inc.; the National Independent Statistical Service; and Independent Statistical Service, Inc. (ISS). 1 One house-year represents policy coverage on a dwelling for 12 months. Most often, it consists of coverage for one policy for an entire 12-month period, but it may also represent a number of policies for which the combined lengths of coverage total 12 months (e.g., four policies, each with three months of coverage). © 2016 National Association of Insurance Commissioners 1 • Texas data were obtained from the Texas Department of Insurance. Historically, the Texas department developed its own home insurance policy forms that are similar, but not identical, to homeowners policy forms countrywide. Although, starting in 2002, insurers were permitted to file their own independent forms, some companies continue
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