The third installment in our four-part look at the 2019 Home Insurance Report
This is the third look at the Commissioner’s Annual Report on Home Insurance in Massachusetts. Since 1996, the DOI has been required to produce a home insurance report pursuant to M.G.L. c. 175 Sec. 4A & 4B. Unlike private passenger auto insurance in Massachusetts, there are no specific laws requiring that a property owner purchase home insurance.
Home insurance coverage rates by Massachusetts County
There were a total of 2,048,711 home insurance policies in force during the year 2019. This number represents and increase of 26,099 policies between 2018 and 2019.
- 257,522 of those policies, were condominium home insurance policies;
- 1,447,045 of the total number of policies, were traditional homeowner policies; and
- 344,145 of the policies, were rental insurance or tenant policies.
Similar to past years, Middlesex County continues to have the greatest number of homeowners and home insurance policies in the Commonwealth. The following table breaks down the total number of policies according to Massachusetts county.
Total Home Insurance Policies by Massachusetts County
| 2019 Home Insurance Policies | By County |
|---|---|
| Middlesex | 468,521 |
| Worcester | 247,131 |
| Essex | 230,106 |
| Norfolk | 219,638 |
| Suffolk | 183,177 |
| Hampden and Hampshire | 174,286 |
| Plymouth | 162,581 |
| Bristol | 155,561 |
| Barnstable, Dukes, and Nantucket | 136,888 |
| Berkshire and Franklin | 70,821 |
Percentage of Home Insurance Policies Voluntary vs. FAIR Plan
The next chart graphs the number of home insurance policies by county. In addition, it shows what percentage of the total policies in each county were voluntary versus policies issue through the FAIR Plan. As to be expected, with the FAIR writing approximately 34.8% of the total policies on the Cape and Islands, that market share is represented in the graph in the counties representing those areas: Barnstable, Dukes, and Nantucket. The county with the second-largest proportion of FAIR Plan policies written is Suffolk County.
2019 Total Home Insurance Policies by County
The Growth of Bundling Home and Auto in Massachusetts
The Commissioner again included in this year’s report a section on the was the growth of bundling home and auto insurance products together. Specifically, the Commissioner noted that during hearings held in the mid-2000s, prior to the introduction of Managed Competition, many large national companies were not interested in expanding home insurance coverage in Massachusetts. The main reason why was that these companies believed that they could not operate within the rules of the old “Fixed and Established” system.
Turning to the 2019, the landscape in the Commonwealth is much changed with 21 insurers having officially entered entered the private passenger automobile insurance market here since “the reform.”
As a result, in addition to increased competition within the private passenger automobile insurance marketplace, many insurers now offer Massachusetts consumers “expanded multi-policy premium discounts to insureds who buy both home insurance and automobile insurance coverage from the same company.”
Home Insurance Credits With Auto Insurance Policy
Looking at the number of premium credits on home insurance coverage for those Massachusetts residents with a related auto insurance, there was a slight decline from 2018 to 2019. More specifically, there was a decrease in premium credits from $74 million in 2018 to $73.4 million in 2019, representing 7,923 fewer home insurance policies with premium credits in 2019.
Number of Home Policies Receiving Premium Credit for Auto Insurance
In terms of the actual number of policies, 7,533 less home insurance policies in urban areas received premium credits for private passenger coverage in 2019 versus 2018 while in coastal areas there were 300 less from 2018 to 2019. The table below shows a side-by-side comparison:
| Total Policies | 2018 | 2019 |
|---|---|---|
| Urban Policies | 190,607 | 183,074 |
| Coastal Policies | 74,235 | 73,935 |
| Total | 264,932 | 257,009 |
Credit average saw an increased from 2018 to 2019
The average credit for auto and home bundling also increased from 2018 to 2019 by $7 from $279 to $286 per policy during 2019. As shown in the graph below this represents an increase from 15.1% to 15.6% for the average urban policy and a decrease from 16.1% to 16.0% for coastal area policies. The chart below reflects data obtained from the Division of Insurance report. In the report, it notes that “the average credit for the top 25 companies in designated coastal and urban areas based on premium credits and average home insurance premiums.”
Average Level of Premium Credit for Those with Auto Insurance
How to read the other articles on this year’s Home Insurance Report
For those individuals interested in reading our earlier articles on the Annual Home Insurance Report from the Massachusetts Insurance Commissioner, please refer to the following articles:
- MA Home Insurance Report Part I | An Overview Of Total Premium & Policy Numbers
- MA Home Insurance Report Part II | MA FAIR Plan
