A report has shown that the costs have skyrocketed over the last decade and a half.
A new report is suggesting that the costs associated with homeowners insurance claims in the United States have been rapidly on the rise over the last 15 years, particularly because of the increasing frequency and severity of the filings that are being made.
The report shows the results of a study performed by the Insurance Research Council.
It was entitled “Trends in Homeowners Insurance Claims,” and it examined the trends in claims that were both related to and completely unrelated to the various catastrophic events that have occurred between 1997 and 2011.
The average homeowners insurance claim payment within that span of time increased from $229 to $626.
The Insurance Research Council pointed out that this represented a tremendous growth of 173 percent. The annualized rate of increase over that entire period of fifteen years was 7.4 percent. By the year 2011, the average claim cost per home covered by a homeowners insurance policy was 27 percent higher than it had been fifteen years earlier.
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Also in that span of time, the average claim payment per claim period – the claim severity – on homeowners insurance policies saw an increase of nearly 200 percent. This was the case for those claims that were made as a result of catastrophic events as well as those that were made as a result of damage unrelated to a catastrophe.
That said, the trend for the severity of claims related to catastrophic events saw more severe increases and decreases from one year to the next within the studied fifteen year period. The number of claims per 100 homes – the frequency of claims – actually dropped notably from the period of 1997 to 2005 for claims that were not related to catastrophes. However, since that time, the frequency has seen an annual increase at a 2.9 percent rate, while there has been a relatively flat progression for the claims related to catastrophes.
It was the homeowners insurance claims related to catastrophes, though, that had the most important role in the claim trends in the latter half of that period of time. It was those claims that made up more than one quarter of all the filings that were made from 1997 through 2003, but rose to 39 percent of those made from 2004 through 2011.