Dwelling Fire, Homeowners Owner- Occupied, and Homeowners Tenant and Condominium/Cooperative Unit Owner’s Insurance Report: Data for 2018 2020 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. The NAIC offers a wide range of publications in the following categories: Accounting & Reporting Special Studies Information about statutory accounting principles Studies, reports, handbooks and regulatory and the procedures necessary for fi ling financial research conducted by NAIC members on a variety annual statements and conducting risk-based of insurance related topics. capital calculations. 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NAIC Executive Office NAIC Central Office NAIC Capital Markets 444 North Capitol Street, NW 1100 Walnut Street & Investment Analysis Office 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 Dwelling Fire, Homeowners Owner-Occupied, and Homeowners Tenant and Condominium/Cooperative Unit Owners Insurance: Data for 2018 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: 2018 House-Years by State and Countrywide by Policy Type................................. 15 Table 2: 2018 House-Years by State and Countrywide by Policy Form ................................ 19 Table 3: 2018 House-Years by State and Countrywide by Amount of Insurance .................. 23 Table 4: 2018 Average Premium by Policy Form by Amount of Insurance Dwelling Fire and Homeowners Owner-Occupied Policy Forms ............................ 31 Table 5: 2018 Average Premium by Policy Form by Amount of Insurance Homeowners Tenants and Condominium/Cooperative Unit Policy Forms ........... 137 © 2020 National Association of Insurance Commissioners Dwelling Fire, Homeowners Owner-Occupied, and Homeowners Tenant and Condominium/Cooperative Unit Owners Insurance: Data for 2018 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 2018 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; Independent Statistical Service, Inc. (ISS); and the Mutual Service Office (MSO). 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). © 2020 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 to use the forms previously promulgated by the department. California data were provided by the California Department of Insurance. The state began collecting homeowners data in 1998, starting with the 1996 data year. Limitations on the Data Average premium is an imperfect measure of the relative “price” of insurance due to wide variations in hazards, economic conditions and real estate values from state to state. Even when comparing identical policy forms and amounts of insurance, premiums for homeowners coverage can differ dramatically across the country. These market differences are explored in more detail in a later section of this narrative. Premium for a homeowners policy is determined by the amount of insurance purchased (generally based on the value of the insured property), the types of property covered, the types of perils covered, and the