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Third Look – Ranking of Massachusetts Home Insurance Policies By County

A look at the home insurance marketplace in Massachusetts

Our Third Article in a 4-Half Collection

That is the third a part of a four-part take a look at the Commissioner’s 2017 Annual Report on House Insurance coverage in Massachusetts. Since 1996, the Division has been required to supply a Residence Insurance coverage Report pursuant to M.G.L. c. 175 Sec. 4A & 4B.

In contrast to personal passenger auto insurance coverage in Massachusetts, there are not any legal guidelines requiring that a property proprietor have residence insurance coverage. With that stated, the aim of the Commissioner’s Annual Report is to shed mild in addition to educate shoppers with respect to the composition and well being of the general house insurance coverage market in Massachusetts. So as to make the general report extra simply digestible, Company Checklists has damaged down its evaluation right into a four-part collection.

Whereas our First Look article was an summary of the whole report and the present state of the house insurance coverage market, the Second Look targeted extra on the standing of the Massachusetts FAIR Plan and the way its market share continues to lower. This week our Third Take a look at the Residence Insurance coverage Report takes a take a look at residence insurance coverage insurance policies by county and different fascinating statistics associated to that matter.

A recap of the key findings of the 2017 report

This yr’s report, which focuses on knowledge from 2017, cites a three.12% improve, or 60,176 insurance policies, within the general variety of house insurance coverage insurance policies within the Commonwealth between 2016 and 2017. This can be a marked improve from the yr earlier than when the Division famous that there was solely a .04% improve in insurance policies from 2015 to 2016.

In Massachusetts, the house insurance coverage market covers non-commercial property, which incorporates dangers of injury to structural and private property, in addition to for dangers involving private property claims.

A take a look at the whole variety of residence insurance coverage insurance policies in drive in 2015

Photograph supply: DOI

In 2017, there have been roughly 1,987,168 house insurance coverage insurance policies in pressure within the Commonwealth. Of that quantity:

  • 24,178 of these insurance policies have been Condominium house insurance coverage insurance policies;
  • 1,449,876 of these insurance policies have been Conventional Home-owner’s insurance coverage insurance policies; and
  • 296,115 of these insurance policies have been Rental insurance coverage or Tenant insurance policies.

On an fascinating aspect observe, in evaluating the above numbers with these reported in each 2015 and 2016, Rental or Tenant insurance policies confirmed the most important improve in numbers, whereas each conventional and condominium barely decreased in quantity throughout the identical time interval.

Residence Insurance coverage Protection Charges Ranked Highest To Lowest By Massachusetts County

If measuring residence insurance coverage charges by county, Middlesex County, probably the most populous county within the Commonwealth, ranks because the county will probably the most house insurance coverage insurance policies in drive in Massachusetts throughout 2017. We thought it’d fascinating to our readers, if we ranked the ten Massachusetts counties based mostly on the variety of house insurance coverage insurance policies that they had in pressure throughout 2017, in descending order.

2017 Residence Insurance coverage Insurance policies By County

1. Middlesex County 454,208 insurance policies
2. Worcester County 239,233 insurance policies
three. Essex County 223,129 insurance policies
four. Norfolk County 214,536 insurance policies
5. Hampden and Hampshire Counties 170,126 insurance policies
6. Plymouth County 165,201 insurance policies
7. Bristol County 159,287 insurance policies
eight. Suffolk County 151,163 insurance policies
9. Barnstable, Dukes and Nantucket 139,zero25 insurance policies
10. Berkshire and Franklin Counties 71,260 insurance policies

Proportion of House Insurance coverage Insurance policies Voluntary vs. FAIR Plan

The subsequent visible from the DOI’s Report charts the quantity of residence insurance coverage insurance policies by county. As well as, it exhibits what proportion of the whole insurance policies in every county have been voluntary versus insurance policies situation via the FAIR Plan.

Total Number of Home Insurance Policies By Massachusetts County

As is clear within the above graph, the FAIR’s Plans largest market share continues to be targeted on the Cape and Islands, the place is writes slightly below half or 40% of all residence insurance coverage insurance policies issued there. That market share is represented within the graph within the counties representing these areas: Barnstable, Dukes and Nantucket. The second largest marketplace for the FAIR Plan is Suffolk County with 14%.2 % of the market adopted by Plymouth County. The county with the bottom market share for the

Monitoring the modifications in variety of insurance policies by county

The chart from the Commissioner’s Annual Residence Insurance coverage Report, tracks the modifications in residence insurance coverage insurance policies by county from 2016 to 2017. Finally, the Division famous that the entire variety of residence insurance coverage insurance policies in every county remained “pretty constant” between these two years.

Home Insurance Policies Statistics in Massachusetts

The Progress of Bundling House and Auto in Massachusetts

The continued progress of the “bundling of auto & residence” didn’t decelerate in 2017. In his report, the Commissioner famous that previous to the introduction of Managed Competitors, many giant nationwide corporations weren’t focused on increasing residence insurance coverage protection in Massachusetts. The primary purpose why was in relation to the various corporations’ perception that they might not function inside the guidelines of the previous “Fastened and Established” system.

A decade after the introduction of “Managed Competitors”, nevertheless, that’s not the case. Along with elevated competitors inside the personal passenger vehicle insurance coverage market, which has seen a further 17 insurers enter the marketplace, two greater than in 2015. Many of those insurers now additionally supply “expanded multi-policy premium reductions to insureds who purchase each house insurance coverage and vehicle insurance coverage protection from the identical firm.”

Within the face of this new development in Massachusetts, the Commissioner requested that the highest 25 residence insurance coverage corporations in Massachusetts report the extent of house insurance coverage premium credit that it offered to its insureds in each 2016 and 2017, who even have motorcar protection with their firm or an “affiliated insurer.”

House Insurance coverage Credit With Auto Insurance coverage Coverage

In 2017, premium credit for residence insurance coverage protection accompanying a associated auto insurance coverage coverage elevated by roughly $2.1 million from 2016 to 2017. The next chart exhibits the breakdown of those house insurance coverage credit between the Commonwealth’s city and coastal areas.

Home Insurance Policies Statistics in Massachusetts

Variety of Residence Insurance policies Receiving Premium Credit score for Auto Insurance coverage

When it comes to precise variety of insurance policies affected, the Division says greater than 2,963 residence insurance coverage insurance policies in city areas acquired premium credit in 2017 versus 2016, whereas general three,766 extra householders insurance policies general had premium credit resulting from associated personal passenger protection in 2017 versus 2016.

Home Insurance Policies Statistics in Massachusetts

Credit score common additionally elevated from 2016 to 2017

The typical credit score for auto and residential bundling additionally elevated elevated $three dollars in 2017, rising from $284 in 2016 to $287 in 2017. As for the typical degree of premium credit score, the next chart exhibits a rise in each city and coastal areas, with coastal growing from 14.9% to 18.three% over the one yr interval, whereas in city areas it elevated from 16.three% to 17.three%.

Home Insurance Policies Statistics in Massachusetts

Protection Choices and Limitations

On this a part of the report, the Division sometimes critiques the kind of coverage types utilized by the highest 25 insurance coverage corporations in addition to the varieties of deductibles and protection limitations included into these firm’s proprietary and ISO-type varieties.

In line with the Division, of the highest 25 house insurance coverage corporations, 20 insurers use normal ISO or IS)-modified varieties for his or her house insurance coverage insurance policies, whereas seven corporations use proprietary varieties, whereas the remaining insurer makes use of an AAIS-developed type. The DOI says that the whole variety of corporations exceeds 25, as a result of two corporations make use of each proprietary in addition to ISO-type varieties.

The next are some highlights from every of the subjects addressed by the Division on this part of the report.

Wind Deductibles

Based on the Division, wind deductibles have turn out to be obligatory a part of nearly all of house insurance coverage corporations commonplace insurance policies within the Commonwealth in an try for these corporations to scale back their danger.

These deductibles apply to any wind-related injury occurring in particular coastal territories or inside a sure distance from the shore. In consequence, the Division notes that these deductibles are most frequently utilized to wind-relate injury involving householders dwelling within the Bristol, Plymouth, Barnstable, Dukes and Nantucket counties in Massachusetts. Moreover:

  • Among the many prime 25 house insurance coverage corporations and the FAIR Plan, all however 4 reported that they’ve obligatory wind deductibles in 2017.
  • The Division says whereas it has required that buyers obtain “full disclosure” of deductibles prior to buying a coverage, the Division continues to reiterate that it stays unclear whether or not shoppers are conscious or perceive “the doubtless giant sums they could be answerable for paying within the occasion of a wind-related loss.”
  • In some situations, wind deductibles have been reported to be as excessive as 5% of the protection for the primary construction.
  • Coastal householders within the Bristol, Plymouth, Barnstable, Dukes and Nantucket counties have the most important wind deductibles.
  • For all coastal and concrete householders both coated by the FAIR Plan or by one of many prime 25 house insurance coverage corporations, 38.7% of those policyholders had a compulsory wind deductible included of their protection for the coverage yr 2017.
  • Breaking this down additional, in coastal areas, 62.three% had a compulsory wind deductible, whereas solely 23.7% of policyholders in city areas had one.

Flood Exclusions

Versus complete protection underneath vehicle insurance coverage insurance policies, house insurance coverage insurance policies don’t cowl injury related to floods. Due to this common exclusion and the frequency and severity of flooding losses, the Division’s report talk about on this part the Nationwide Flood Insurance coverage Program (“NFIP”) administered by the Federal Emergency Administration Company (“FEMA”).

Underneath the NFIP, the federal government performs the position of underwriter and assumes the monetary danger for damages whereas counting on personal insurance coverage brokers to promote insurance policies. Nevertheless, the proportion of house owners with flood insurance coverage in 2017 continues to stay comparatively low.

In Massachusetts, for instance, FEMA reported that solely 63,242 Massachusetts policyholders had flood insurance coverage  per the NFIP report for the calendar yr 2017. This quantity represents a 1.eight% lower within the variety of insureds from 2016. This chart from the Division’s report additional breaks the coverage rely down by counties.

Home Insurance Policies Statistics in Massachusetts

The newest knowledge from the NFIP as of Might 31, 2018, ranked Massachusetts 13th within the nation with respect to the variety of insurance policies that have been positioned from the state via the NFIP, regardless that Massachusetts is ranked because the 15th most populous state within the nation. Whereas the Division says it continues to remind insurers and producers the significance of providing flood insurance coverage to all Massachusetts residents, the DOI says that the entire variety of houses with enough flood insurance coverage protection continues to be comparatively low.

Flood insurance coverage is obligatory just for these houses recognized by FEMA mapping as in high-risk flood areas and which are mortgaged by means of a federally-backed lender. Nevertheless, the NFIP will present flood protection for any property holders if the property is in an authorised NFIP group. The property needn’t be in a flood plain to qualify for protection. Contemplating the relative danger to those areas, having a county on the Cape, like Barnstable, with lower than a 10% buy price for flood insurance coverage appears shocking. However, as this chart demonstrates, the acquisition of flood insurance coverage is down throughout the board in each county in Massachusetts.

Home Insurance Policies Statistics in Massachusetts

Subsequent week’s article

In subsequent week’s fourth look, the remaining elements of the Division’s House Insurance coverage Report can be reviewed together with Monetary Outcomes, Cancellations and Non-Renewals together with a take a look at strategies of setting Residence Insurance coverage Limits.

Are you trying to begin from the start of our collection? Listed here are the hyperlinks to the studies from the primary two elements of our four-part collection.