Category Archives: Homeowners Insurance

Homeowners Insurance, Insurers and the Economy

Homeowners Premiums Rise Faster Than Inflation; Expect This to Continue

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Homeowners insurance premium rates are rising faster than inflation, S&P Global Market Intelligence data shows, and Triple-I’s chief insurance officer says they’re likely to keep climbing.

From 2017 through 2020, premium rates are up 11.4 percent on average countrywide, according to S&P. Recent factors include rising material costs and supply-chain disruptions that are driving up home-replacement costs — and insurers are adjusting premiums accordingly. The countrywide average annual premium has increased to $1,398 in 2021.

“From everything I know about homeowners’ risk, I expected those numbers to be higher,” Triple-I’s Dale Porfilio told the Washington Post. “Honestly, I would say they still should go up further.”

Most mortgage lenders require borrowers to carry homeowners insurance. According to a recent Bankrate.com analysis, the average homeowner spends about 1.91 percent of household income on home insurance. Location often drives costs up, particularly if the house is in an area prone to natural disasters. Some areas have higher rates because it costs more to rebuild a house there.

Porfilio said insured damage from tornados, hurricanes, severe storms, wildfires and other natural disasters has reached $82 billion in 2021, bringing the total from 2017 through 2021 to more than $400 billion. As the chart below shows, average insured natural catastrophe losses have increased nearly 700 percent since the 1980s.

“Climate risk is continuing to put pressure on all things weather-related,” Porfilio said. “We are seeing more severe hurricanes, more severe wildfires, and the science isn’t as clear on tornado events in terms of whether they’re changing in frequency or not. But what we definitely do know is that severity is going up.”

When a natural disaster affects a wide area, the demand for materials and labor puts pressure on prices.

On top of the extreme-weather and population shifts that have been driving up insurers’ costs and, in turn, policyholders’ premiums, add the impacts of the pandemic-driven supply-chain disruptions.

“When the pandemic hit, lumber producers feared a repeat of the Great Recession,” the Washington Post reported. “They cut production and unloaded inventory. But demand soared, catching them by surprise. The price of lumber spiked to $1,500 per thousand feet of board in March, a 400 percent year-over-year increase.”

Homeowners can find recommendations for lowering their homeowners insurance costs on Triple-I’s website.

Disaster Preparedness, Disaster Resilience, Homeowners Insurance

Insurer Declined to Renew your Homeowners Policy? You Have Options

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By Maria Sassian, Triple-I consultant

In high-risk areas like the West Coast with its wildfires and Florida with its hurricanes and floods, insurance non-renewals are on the rise as insurers attempt to limit their exposure to future losses. Homeowners insurance protects your most valuable possession, so the prospect of getting a notice that your policy will not be renewed can be nerve-racking.  

But don’t panic if that happens – you have options.

Know the difference between cancellation and non-renewal

There is a big difference between an insurance company canceling a policy and choosing not to renew it. Insurance companies can’t cancel a policy that has been in force for more than 60 days except when:

Nonrenewal is a different matter. Either you or your insurance company can decide not to renew the policy when it expires. Depending on the state you live in, your insurance company must give you a certain number of days’ notice and explain the reason for not renewing before it drops your policy.

Question the non-renewal

If you think the reason the insurance company provided for non-renewing is unfair or want a further explanation, call the company.  You may get an opportunity to keep your coverage by verifying that you’ve taken risk mitigation measures such as replacing the roof or removing flammable materials near your house.

If your policy isn’t renewed because of a failed inspection, making the proper updates could help you maintain coverage.

Shop around for another policy

If your insurer insists on non-renewing, shop around for a new policy. Here are some tips from Triple-I’s How to Save Money on Your Homeowners Insurance guide:

  • Ask friends and relatives for recommendations for insurers and then do your due diligence.
  • Contact the state insurance department to find out whether they make available consumer complaint ratios by company. If they do, check into the insurers you’re considering doing business with.
  • Check the financial health of prospective insurance companies by using ratings from independent rating agencies and consulting consumer magazines for reviews.
  • For price quotes, call companies directly or access information online. Your state insurance department may also provide comparisons of prices charged by major insurers.
  • Get quotes from at least three companies.
  • Don’t shop based on price alone. Remember, you’ll be dealing with this company in the event of an accident or other emergency. When you need to file a claim you’ll want an insurer that provides good customer service, so test that while you’re shopping, and choose a company whose representatives take the time to address your questions and concerns.

Explore your state’s shared market option

If you’ve shopped around and can’t find coverage, you may need to turn to the state-run shared market. Many states offer Fair Access to Insurance Requirements (FAIR) policies for high-risk homes, or beach and windstorm plans for coastal properties. These policies offer limited coverage and are often more expensive than a standard home policy from a private insurer.

For more comprehensive coverage, homeowners in California may purchase a “difference in conditions” policy that complements FAIR Plan coverage.

Look into surplus lines

The surplus lines market, which is comprised of highly specialized insurers, exists to provide coverage that is not available through licensed insurers in the standard market. Each state has surplus lines regulations and each surplus lines company is overseen for solvency by its home state.

Available surplus lines companies vary by state. Speak with an insurance agent or broker about surplus lines if you’ve been rejected by at least three other insurers.

Non-renewals in disaster-prone areas

 State regulators are pushing back against the non-renewal trend by placing moratoriums on non-renewals for certain zip codes, as happened in California recently, or for certain companies, as is the case in Louisiana.

Whether the decision not to renew is yours or your insurer’s, don’t put off shopping for a new policy. You don’t want coverage on your home to lapse.

Catastrophes, Disaster Preparedness, Disaster Resilience, Flood Insurance, Floods, Homeowners Insurance

Relocated Due to Ida? You Might Be Covered for Additional Living Expenses

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Standard homeowners and renters insurance policies include additional living expenses (ALE) coverage. ALE pays the costs of living away from home—above and beyond your customary expenses— if you cannot live at home due to damage caused by an insured event that makes the home temporarily uninhabitable.

What expenses are typically covered by ALE?

ALE covers living expenses incurred by you so your household can maintain its normal standard of living.  These expenses could include:

  • Temporary housing
  • Moving costs
  • Grocery or restaurant bills 
  • Storage costs
  • Laundry expenses
  • Transportation (e.g., if your temporary home requires a longer commute)
  • Parking fees
  • Pet boarding

Your homeowners policy’s ALE coverage is usually equal to 20 percent of your home’s insured value—a home insured for $200,000, for instance, may have ALE coverage of up to $40,000—or limited to a certain timeframe (e.g., no more than 12 months).

What about Damage from Hurricane Ida?

Standard ALE coverage should be triggered if damage from a covered peril (e.g., wind and rain) caused the home to be uninhabitable. In addition, some companies provide ALE coverage when policyholders leave their home or apartment due to mandatory evacuation orders. Policyholders should speak with their insurance professional to confirm whether their policy provides ALE coverage for their situation.

As a reminder, standard homeowners insurance policies typically do not provide coverage for flood damage. The National Flood Insurance Program (NFIP) covers physical damage from flood but does not include ALE. Some privately sold flood policies offer ALE following flood losses. 

What Other Help Is Available?

Federal assistance has been made available through the Federal Emergency Management Agency (FEMA). On September 2, FEMA announced they will cover hotel expenses for survivors of Hurricane Ida with damaged homes or dwellings in 25 parishes in southeast Louisiana.

The program, known as Transitional Sheltering Assistance, will provide survivors with short-term housing free-of-charge as they recover from the Category 4 storm. Survivors must first register with FEMA at disasterassistance.gov or by calling the FEMA helpline at 800-621-3362. Those wishing to take advantage of the program must find and book their own hotel rooms. Participating hotels are listed at www.femaevachotels.com.

Catastrophes, Coastal Property, Disaster Resilience, Flood Insurance, Floods, Homeowners Insurance

After Ida: Stay Safe and Report Damage Quickly

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“Stay informed, stay safe, and contact your insurance professional as soon as possible.”

The Insurance Information Institute is working with insurers in the aftermath of Hurricane Ida to monitor property damages and assist consumers as they recover. In this video, Triple-I CEO Sean Kevelighan provides guidance for homeowners to help them ensure a smooth claims experience and avoid being taken advantage of by unethical contractors and other scammers who tend to emerge after disasters.

“Right now, the most important thing those impacted by Ida can do is remain safe and stay out of the way out of recovery workers,” Kevelighan says. “The storm may have passed, but remember that new dangers may be lurking.”

In particular, he points to threats from downed electrical wires and washed-out roads and bridges. Kevelighan also emphasizes the importance of quickly reporting property damage to your insurer.  

Other resources:

Hurricanes: Insurance and recovery resources

After a hurricane, beware of the dangers that remain

When disaster strikes: Preparation, response and recovery

Health safety following a flood

Recovering from a flood

Catastrophe-related fraud

Health & Safety, Homeowners Insurance

Independence Day Summer Fun Also Carries Risks

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By Loretta Worters, Vice President, Media Relations, Triple-I

Independence Day is associated with fireworks displays, barbeques, and poolside parties, yet even summer fun carries risks.

Here are four summertime liability risks you should be aware of and recommendations on what you can do to protect yourself:

FIREWORKS: Fireworks may be a Fourth of July tradition, but they can also cause either injuries or fires. More than one of every four (28 percent) fireworks-caused fires nationwide each year occur on the Fourth of July, according to the National Fire Protection Association (NFPA.) In recognition of Fireworks Safety Awareness Week (June 28-July 4), the Triple-I encourages everyone to follow federal fireworks laws and local fireworks laws. 

GRILLS: About four out of five (79 percent) grilling fires involve gas grills, according to the U.S. Fire Administration (USFA). Patios, terraces, and screened-in porches are the leading home locations for grill fires, the USFA has found. The NFPA reports an average of 8,900 home fires are started by grills each year, with numbers peaking during the month of July. Grill-related fires can damage your house, outdoor possessions and structures and cause injuries to guests. The latter could result in a lawsuit.

POOLS: Drowning is the leading cause of unintentional death among children aged one to four years old and, between 2016 and 2018, 83 percent of these tragedies occurred at residential pools, according to the U.S. Consumer Product Safety Commission reported. In addition, non-fatal pool and diving board accidents can leave victims with long-term health issues.

ALCOHOL: Social host liability laws vary widely but 40-plus states have them on the books. Most of these laws offer an injured person a method to sue the person who served them alcohol while on their premises. Criminal charges may also apply under some social host liability laws.

Any of these scenarios pose a liability risk, so homeowners are advised to review their insurance policies to understand their policy’s liability limits. A liability limit of at least $300,000 is often a cost-effective step to take in consultation with an insurance professional.

In addition, consider adding an umbrella liability policy, which provides liability protection over and above current coverage. 

Homeowners Insurance, Lightning

Cost of Lightning-Caused Claims Soared Due to 2020’s U.S. Wildfires

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By Loretta Worters, Vice President, Media Relations, Triple-I

For the fourth consecutive year, the number of lightning-caused U.S. homeowners insurance claims decreased in 2020, even as the average value of those claims has more than doubled since 2017, according to Triple-I’s analysis of national insurance claims data. 

Lightning-related homeowners insurance claim costs nationally rose dramatically due to a series of lightning strikes across Northern California in 2020.  The average cost per lightning claim in California was $217,555 in 2020, while the national average for this type of claim was nearly $29,000.

Triple-I also found that:

  • More than $2 billion in lightning-caused U.S. homeowners insurance claims were paid out in 2020 to 71,000-plus policyholders
  • The average cost of a lightning-caused U.S. homeowners insurance claim increased 141 percent between 2019 and 2020 (from $11,971 to $28,885) and 168 percent from 2017 to 2020 (from $10,781 to $28,885)
  • The average number of lightning-caused U.S. homeowners insurance claims decreased by nearly 7 percent between 2019 and 2020 (from 76,860 to 71,551)

The wildfires in California and elsewhere damaged homes which had to be either repaired or rebuilt with more expensive construction materials. The National Association of Home Builders reported that, between mid-April and mid-September 2020, lumber prices soared more than 170 percent nationwide, adding $16,148 to the price of a typical, new single-family home.

The August Complex Fire, started by lightning strikes in August 2020, was the largest in California’s history, as defined by acres burned, according to the California Department of Forestry and Fire Protection (CAL FIRE). It spread across 1 million acres and impacted seven counties.

State-by-State Numbers

Florida – which has the most thunderstorms— remained the top state for lightning-caused homeowners insurance claims in 2020, with 6,756, followed by Georgia (4,686), Texas (4,675), and California (4,233).

Homeowners Insurance Coverage

Damage caused by lightning, which results in a fire, is covered under standard homeowners insurance policies.  Some policies provide coverage for power surges that are the direct result of a lightning strike, which can cause severe damage to appliances, electronics, computers and equipment, phone systems, electrical fixtures and the electrical foundation of a home.

In recognition of Lightning Safety Awareness Week, June 20-26, the Triple-I and the Lightning Protection Institute (LPI), a national organization that establishes standards for specifying and installing lightning protection systems and promotes lightning safety, encourage homeowners to install  lightning protection systems in their homes. 

“When we think of lightning safety, we should make a distinction between personal safety and property protection,” said Tim Harger, LPI’s Executive Director.  “Personal safety is what we do during a storm and the safest place in any lightning event is within a structure protected by a properly designed, inspected and certified lightning protection system,” he said.  “Installing lightning protection systems in our homes or businesses is an action we can take before a storm that can mitigate against property damage.”  

Catastrophes, Disaster Preparedness, Disaster Resilience, Homeowners Insurance, Webinars

Bracing for Another Brutal Wildfire Season

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Wildfires in California and across the West are starting earlier and ending later each year.  The ongoing drought worsened last week, with every part of the state in moderate drought or worse.

After a 2020 fire season that Janet Ruiz, Triple-I’s California-based director of strategic communications, called “anything but normal,” this year’s season may be even worse.

Warmer spring and summer temperatures, reduced snowpack, and earlier spring snowmelt create longer, more intense dry seasons that make forests more susceptible to wildfire. The fire season’s length is estimated to have increased by 75 days across the Sierras and seems to correspond with an increase in the extent of forest fires across the state.

“Hots are getting hotter”

California Gov. Gavin Newsom recently expanded a drought emergency declaration while seeking more than $6 billion in multiyear water spending.

“The hots are getting a lot hotter in this state, the dries are getting a lot drier,” he said. “We have a conveyance system, a water system, that was designed for a world that no longer exists.”

California Insurance Commissioner Ricardo Lara has called for property insurers across the state to play a larger role in boosting wildfire preparedness among homeowners and businesses by providing more wildfire mitigation incentives. He spotlighted eight insurance companies in the state and the California FAIR Plan, which offer discounts to policyholders that have taken adequate steps to harden homes and mitigate wildfire risk.

This group represents only 13 percent of the state market, and Lara hopes the figure will rise significantly this year.

“Insurance companies support and echo Commissioner Lara’s call for mitigation,” Mark Sektnan, vice president of American Property Casualty Insurance Association (APCIA), said in a statement on behalf of APCIA, the Personal Insurance Federation of California (PIFC), and the National Association of Mutual Insurance Companies (NAMIC).  “Insurers are working with scientists and modelers to further the science of understanding how to better mitigate wildfire risk and understanding the value of various mitigation programs and efforts. While we cannot stop wildfires, we are learning how to mitigate the risks and are moving towards understanding and quantifying the value of individual and community mitigation. Insurers encourage homeowners, renters and businesses to get their property and finances ready for wildfires, as we are facing another dry, hot summer.”

Mostly caused by people

As much as 90 percent of wildland fires in the United States are caused by people, according to the U.S. Department of Interior. Some human-caused fires result from campfires left unattended, the burning of debris, downed power lines, negligently discarded cigarettes and intentional acts of arson. The remaining 10 percent are started by lightning or lava.

The Insurance Institute for Business and Home Safety provides recommendations for reducing the likelihood of your home catching fire, including noncombustible siding, decking and roofing materials; covered vents; and fences not connected directly to the house. In addition, combustible structures in the yard such as playground equipment should be at least 30 feet away from the house and vegetation 100 feet away.

But given weather, climate, and population trends, more than individual planning and risk transfer through insurance will be required to head off wildfire risk and bounce back from events. Innovation and a resilience mindset on the part of governments, businesses, homeowners, and communities will need to take hold.

Want to learn more about wildfire mitigation and resilience? Register for “Wildfire Ready: How Do You Prepare Your Home and Finances for Wildfires?” on May 20 at 10 a.m. (PT)

Auto Insurance, Homeowners Insurance

Be prepared for hail

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Hailstorms are among the most destructive weather events, with hailstones ranging in size from a pea to a grapefruit.  When these frozen missiles plummet from the sky, damage to cars and buildings can be severe.

Steve Bowen, a meteorologist at Aon and director of the broker’s Impact Forecasting unit, has said hail can contribute as much as 50 percent to 80 percent of severe convective storm losses in any given year, with tornadoes, wind and flooding providing the rest.


An April 28 storm that included apple-size hail in in some parts of the Dallas-Fort Worth region caused close to $400 million in insured losses, according to the Insurance Council of Texas. Spokesperson Camille Garcia says the loss estimate is based on 32,000 car and homeowners claims sent to insurers through May 3. Most came from Tarrant County and the city of Keller. Once roof inspections are completed many more claims are expected.

State Farm alone paid out $474.6 million in hail claims in Texas in 2020, according to the company’s most recent Hail Damage report.

While you can’t prevent hail from failing on your property, you can lessen the possible damage by putting vehicles in the garage and moving patio furniture under cover. Close blinds and curtains to prevent broken glass from blowing inside and possibly causing injuries or damage.

For homes without garages, which is common in the South, I’m told, hail-resistant car covers can be an effective option.

If you do experience hail damage, your auto and home insurance policies will cover it. Take lots of pictures of the damage and submit your claim as soon as you can.

If contractors come knocking on your door, hold off on signing repair contracts. Do your due diligence, deal with reputable contractors, and get references. Consult your insurance adjuster before signing any contracts.

Click here for more insurance tips.

For more on hail damage trends and mitigation tactics, see Triple-I’s paper Severe Convective Storms.

Auto Insurance, Homeowners Insurance

A Little Care Can Prevent Tree Damage to Property

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People have a mixed relationship with trees. On the one hand, trees provide beauty and shade – along with reducing carbon dioxide in the atmosphere and providing much of the oxygen we breathe. 

But let one fall on your house or bring your car to a sudden stop and suddenly trees become a problem.

For advice on keeping your trees healthy, your family safe, and preventing property damage, Triple-I talked to certified arborist Dylan Brown.

Much of the damage trees can cause to property is often covered by insurance. Generally speaking, if a tree hits your home or other insured structure, your standard homeowners insurance policy covers the damage to the structure and its contents.

Properly selected, placed, and maintained trees can provide excellent wind protection for a house, which can reduce heating costs and noise from neighbors and traffic. By putting thought and energy into planting and maintenance, homeowners can reap these benefits  while preventing much potential damage.

To minimize damage from your own trees, it’s important to maintain their health and properly prepare them for winter weather and storms.

While some trees don’t handle wind well, others can withstand some of the most powerful gusts. Blue River Restoration Services in Indianapolis recommends live oaks and maples, crepe myrtles, and cypress trees as “safe bets” when considering wind damage.

“These trees have strong roots to keep them in place and thick bark that supports them in windy conditions,” Blue River’s website says. It also recommends not to plant large shade trees within 12 feet of structures that could be damaged by tree roots.

“While most trees’ roots are not invasive enough to cause damage to your house or pavement, some will,” the website says. “Aspens, willows, American elms, and silver maples all have root systems that can stretch for acres. With these types of trees, there is no way to control their roots that can disrupt the foundation of your home.”

Tree roots don’t destroy the foundation but instead shift the soil under and around them, causing them to become unstable.

“Some homeowners deal with intrusive roots by grinding down or removing them,” Blue River says. “This can be expensive and is very harmful to the tree. Wounding a tree’s roots creates points of entry for pathogens, leaving a tree vulnerable to disease.”

A diseased tree is more likely to have branches that will break off and cause damage during high winds. Trees with inadequate root systems may blow over or break off at the ground line. A general rule is that you should not plant any trees within 20 feet of your house.

Insurance “what ifs?”

What happens if a neighbor’s tree falls on your house? You’ll need to file a claim with your insurance company. If negligence can be proved—such as a diseased tree or tree that wasn’t properly maintained — your company may try to collect from your neighbor’s policy. If that happens, you may be reimbursed for your deductible.

If a tree falls on your car, damage is covered under the comprehensive portion of your auto insurance policy.

Standard home insurance polices also provide coverage for damage to trees and shrubs due to fire, lightning, explosion, theft, aircraft, vehicles not owned by the resident, and vandalism Coverage is generally limited to about $500 for any one tree, shrub or plant.

For more Information:

If a Tree Falls on Your House, Are You Covered?

Understanding Trees and Tree Maintenance (a Triple-I video)

Preventing Trees From Falling (a Triple-I video)