The latest annual issue of the Massachusetts Division of Insurance’s Home Insurance Report has been published. The report reviews the calendar year 2017 with respect to the home insurance marketplace in Massachusetts. The Division of Insurance, which has published the annual report since 1996, is required to produce an annual home insurance report pursuant to M.G.L. c. 175 Sec. 4A & 4B.
Unlike private passenger auto insurance in Massachusetts, there are no laws requiring that a property owner have home insurance. Notwithstanding that fact, however, homeowner’s insurance continues to be the second largest line of property and casualty coverage in the Commonwealth (after private passenger auto insurance).
For those interested in how the Division compiles the report, it uses aggregate 2015, 2016 and 2017 data from both insurers and their statistical agents in the Massachusetts homeowner’s marketplace. All of the data collected is then sorted by Massachusetts zip codes and Insurance Services Office, Inc. (“ISO”) territories in order to produce the report. The Division cautions in the report though,
It is important to note that while some of the results in this report apply to all home insurance policies in the Commonwealth, other results apply to policies written by only the 25 largest Massachusetts home insurance companies, FAIR Plan and/or only to particular zip codes in the Commonwealth.
Total Amount of Home Insurance policies in Massachusetts during 2017
Summarizing the chart below, according to the DOI, there were a total of 1,987,168 home insurance policies in force in 2017. Home insurance policies have been on the rise since 2015, with the total number of homeowners policies increasing 3.12% between the years 2016 and 2017. As a result, there were or 60,176 policies issued in 2017 versus 2016, in which 1,926,992 policies were in force. This upward trajectory continues the trend from seen from 2015 to 2016, which also saw an increase in home insurance policies of approximately 0.04%.
The following chart provided by the Division of Insurance better illustrates the upwards trend over this three year period.
The multi-billion dollar Massachusetts Home Insurance marketplace
As many of readers already know, the home insurance market in Massachusetts is composed of three major types of home insurance: condominium, traditional homeowners and rental insurance. In Massachusetts, policies issued in the home insurance market cover “…non-commercial property for the risks of damage to structural and personal
property as well as for the risk of personal liability claims.”
Since the last Annual Home Insurance Report, approximately 7 more insurance companies have begun offering homeowners insurance here in the Commonwealth, bringing the total to 79 insurance companies. It is important to note, however, that this number does not represent the total number of insurers licensed in the Commonwealth, rather only those who have written ten or more HO-3 or similar type policies in a Massachusetts county between July 1st – December 31st, 2017.
The following graph charts the three-year trend in the total policies by type of coverage for each of these three types of home insurance.
As evidenced by the above chart, each of the three major types of traditional home insurance saw a slight increase in 2017 as to the total amount of policies written when compared to both the years 2015 and 2016. More specifically, there were 241,278 condominium policies in force in 2017, approximately 14,212 more than in 2016 and 16,936 more than in 2015.
With respect to traditional homeowners, however, while there were approximately 7,844 more homeowners policies in 2017 than 2016, with 1,449, 876 policies in force, this number is less than in 2015 when the number of policies was 1,452,671.
As for tenant policies, the number increase the more between 2016 and 2017 than from 2015 to 2016, with 46,856 more policies in force.
In terms of premium, these licensed carriers wrote approximately $2.4 billion in written premium for home insurance policies in Massachusetts, or about 2.9% more than the amount reported for calendar year 2016. Of that amount, almost 92.8% of the that total $2.4 billion in premium paid was for traditional homeowners insurance, with premiums increasing by approximately $62.8 million premium between 2016 and 2017.
More to come on the Annual Home Insurance Report in the coming weeks
With so much information packed into this annual report, Agency Checklists will break the report up into a four-part series, similar to other years. The coming weeks will see further articles on the state of FAIR Plan, home insurance coverage by counties, the impact of auto insurance and flood insurance on this market as well as financial results from the report.