Facts + Statistics: Homeowners and renters insurance

 

Homeowners insurance expenditures

The average homeowners insurance premium rose by 1.8 percent in 2019, following a 3.1 percent increase in 2018, according to a March 2022 study by the National Association of Insurance Commissioners, the latest data available. The average renters insurance premium fell 2.8 percent in 2019 marking the fifth consecutive annual decline. Renters insurance premiums fell 0.6 percent in 2018. (See tables in Expenditures for homeowners and renters insurance section).

 

Home inventories

On average, over nine survey years ending in 2020, 49 percent of homeowners said they prepared an inventory of their possessions to help document losses for their insurers, according to polls conducted for the Insurance Information Institute (Triple-I). Forty-three percent of homeowners said they had an inventory in the 2020 Triple-I Consumer Poll. The survey showed that homeowners in the South and West were more likely to have a home inventory (48 percent and 41 percent), followed by homeowners in the Northeast and Midwest (both regions at 39 percent).

 

Causes of homeowners insurance losses

In 2020, 6 percent of insured homes had a claim, according to ISO. Property damage, including theft, accounted for 97.7 percent of homeowners insurance claims in 2020 (latest data available). Changes in the percentage of each type of homeowners loss from one year to another are partially influenced by large fluctuations in the number and severity of weather-related events such as hurricanes and winter storms. There are two ways of looking at losses: by the average number of claims filed per 100 policies (frequency) and by the average amount paid for each claim (severity). The loss category “water damage and freezing” includes damage caused by mold, if covered. Every state except Alaska, Arkansas, New York, North Carolina and Virginia has adopted an ISO mold limitation for homeowners insurance coverage, which allows insurers to exclude the coverage unless the condition results from a covered peril.

Homeowners Insurance Claims Frequency*

• About one in 20 insured homes has a claim each year.
• About one in 35 insured homes has a property damage claim related to wind or hail each year.
• About one in 60 insured homes has a property damage claim caused by water damage or freezing each year.
• About one in 385 insured homes has a property damage claim related to fire and lightning.
• About one in 525 insured homes has a property damage claim due to theft each year.
• About one in 1,425 homeowners policies has a liability claim related to the cost of lawsuits for bodily injury or property damage that the policyholder or family members cause to others.

*Insurance Information Institute calculations, based on ISO®, a Verisk Analytics® business, data for homeowners insurance claims from 2016-2020 (see table above).

 

Consumer prices

To shed light on inflation, the Bureau of Labor Statistics maintains a consumer price index (CPI) which tracks monthly and annual changes in the average prices paid by urban consumers for a representative basket of goods and services. The Consumer Price Index for All Urban Consumers (CPI-U) represents data for 93 percent of the U.S. population not living in remove rural areas, institutions, or on military bases. The CPI-U rose 8 percent in 2022. The cost of motor vehicle insurance for these consumers increased 7.9 percent in 2022 while the cost of used cars and trucks increased 12.7 percent.

 

Expenditures for homeowners and renters insurance

The average homeowners insurance premium rose by 3.1 percent in 2018, following a 1.6 percent increase in 2017, according to a January 2021 study by the National Association of Insurance Commissioners, the latest data available. The average renters insurance premium fell 0.6 percent in 2018 marking the fourth consecutive annual decline. Renters insurance premiums fell 2.7 percent in 2017.

The U.S. homeownership rate was 65.5 percent in the fourth quarter of 2021, according to the U.S. Census Bureau. The 2010 Census showed that in some of the largest cities renters outnumbered owners, including New York, where 69.0 percent of households were occupied by renters, followed by Los Angeles (61.8 percent), Chicago (55.1 percent) and Houston (54.6 percent). 

 

Home injuries

 

High-risk markets

A myriad of different programs in place across the United States provide insurance to owners of property in high-risk areas who may have difficulty obtaining coverage from the standard market. Residual, shared or involuntary market programs make basic insurance coverage more readily available. Today, property insurance for the residual market is provided by Fair Access to Insurance Requirements (FAIR) plans, beach and windstorm plans, and two state-run insurance companies in Florida and Louisiana: Florida’s Citizens Property Insurance Corp. and Louisiana’s Citizens Property Insurance Corp. Established in the late 1960s to ensure the continued provision of insurance in urban areas, FAIR plans often provide property insurance in both urban and coastal areas. Beach and windstorm plans cover predominantly wind-only risks in designated coastal areas. Over the past four decades FAIR and beach and windstorm plans experienced explosive growth both in the number of policies and in exposure value.

 

Renters and homeowners demographics

In 2021, 65.4 percent of housing units were owner occupied and 34.6 percent were renter occupied, according to the latest U.S. Census figures.

The nation's homeowners paid a median of $1,672 monthly housing costs in 2021, compared with $1,191 for renters, according to the latest American Community Survey from the U.S. Census Bureau.

However, renters usually paid a higher percentage of their household income on these costs than did owners, 47.4 percent compared with 27.4 percent of homeowners who spent 30 percent or more of their income on housing costs in 2021.