Homeowners’ Insurance Marketplace Remains Half the Size of Auto Marketplace
While the homeowners’ insurer marketplace in Massachusetts continues to grow, topping $2.8 Billion in 2021, it still is about half the size of Massachusetts’s Private Passenger Automobile Insurance marketplace. According to the latest Annual Home Insurance Report from the Division of Insurance, homeowners’ insurance companies collected approximately $2.8 Billion in premiums in 2021, an increase over the $2.7 Billion in premiums reported in the previous year. The DOI noted a 6.6% increase in premiums reported for 2020.
Continuing the pattern of past years, the vast majority of policies, about 92.8%, were for traditional homeowners’ insurance, with premiums in this particular category increasing by approximately $161.9 million.
The following chart highlights the homeowners’ insurance lines and their place within the Massachusetts insurance industry:
Why the Division of Insurance Publishes an Annual Home Insurance Report
Published since 1996, the Division of Insurance is required to produce an annual home insurance report pursuant to M.G.L. c. 175 Sec. 4A & 4B. This year’s report relies on aggregate data provided by insurers and statistical agents with respect to the calendar years 2018, 2019, and 2020, which are then sorted by zip code and ISO territories. While the report may include data applying to all home insurance policies in the Commonwealth, most data comes from the top 25 largest home insurers in Massachusetts and the FAIR Plan. This year’s report takes a look at this marketplace for the calendar year 2021.
Unlike private passenger auto insurance in Massachusetts, no specific laws require a property owner to have home insurance. Notwithstanding that fact, however, homeowner’s insurance is the second-largest line of Property and Casualty coverage in the Commonwealth (after state-mandated personal auto insurance).
Total Number of Home Insurance Policies in Massachusetts from 2018-2021
The total number of homeowners insurance policies increased by 99,109 from 2020 to 2021, a marked improvement from the increase of 8,760 policies from 2019 to 2020.
The following chart shows the total amount of home insurance policies from 2019 through 2021:
Total Number of Policies by Type of Coverage
Breaking down the above increase in home insurance policies by type of policy, the DOI noted that all three types of homeowners’ policies saw an increase, with tenant and condominium policies increasing by 36,259, while single homeowner’s policies increased by 51,987. The following chart highlights the differences between these three types of policies from 2017 through 2022.
Total Premium by Type of Coverage
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” and are comprised of three major types of home insurance policies: condominium, traditional homeowners, and rental insurance.
The following chart compiles data from the Division of Insurance in order to review the total premium by type of coverage for the Tenant, Condo, and single Homeowner’s markets. Agency Checklists has included data from previous reports in order to provide a comparison of premium data over the past six years.