MarketScout says homeowners premiums hit hardest
In our monthly look at the personal lines market rate, Dallas-based insurance exchange MarkeScout says the current landscape shows homeowners insurance getting more expensive.
“Homeowners in non-cat areas, such as New Mexico or Nevada, will enjoy renewals as expiring or perhaps even a slight rate decrease. However, if you live in a state that touches a coastal area, is prone to quakes, hail or tornadoes, you will pay more,” says MarketScout CEO Richard Kerr.
One of the main reasons insurers continue to adjust rates is that catastrophe modeling companies are increasing widening the territories included within the scope of the areas that could be potentially be impacted by huge storms. MarketScout contends that while many agree the sophisticated catastrophe modeling employed today creates more accurate insurance prices reflecting the actual risk involved, many underwriting companies find the models questionable. The company says as a result projections for 2013 may prove valuable, or deemed inaccurate, as occurred in 2012.
Echos of this argument have been heard her in Massachusetts as well, with many arguing that the modeling used to calculate rates here in Massachusetts include more data from Florida than from the actual data reflecting the risks here in the Commonwealth.
An in-depth look at the numbers
Personal articles coverage rates remained unchanged this month at three percent. U.S. homeowners rates, however, have been assessed a composite rate increase of over four percent for houses valued at under $1,000,000 while for those over that number rates have increased over five percent.
In contrast, automobile rates across the country while up two percent in February are now lower. Adds Kerr, “There are so many solid auto insurers all competing for the monoline auto risk. This creates price competition, which results in lower premiums and package discounts for those insureds that place multiple lines with one insurer.”
The following is a summary of the personal lines rates:
|Homeowners under $1,000,000 value||Up 4%|
|Homeowners over $1,000,000 value||Up 5%|
|Personal Articles||Up 3%|