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Cost of homeowners insurance claims increases at 2x rate of inflation – PropertyCasualty360

Cost of homeowners insurance claims increases at 2x rate of inflation – PropertyCasualty360

Cost of homeowners insurance claims increases at 2x rate of inflation – PropertyCasualty360
News from Cost of homeowners insurance claims increases at 2x rate of inflation – PropertyCasualty360:

Carriers see increased costs of homeowners claims. Carriers see increased costs of homeowners claims.

With inflation low for the last 17 years, you would expect the cost of homeowners insurance claims to remain low as well. According to a new report from the Insurance Research Council (IRC), however, the cost of those claims has been increasing at twice the rate of inflation. The study, Trends in Homeowners Insurance Claims, 2015 Edition, found that the average claim payment per insured home across the U.S. rose from $ 229 in 1197 to $ 625 in 2011, then fell to $ 442 in 2013. This was an increase at an average annualized rate of 5% since 1997 while inflation averaged approximately 2.4% during the same period.

As used in the report, an insured home is defined as a house, apartment or condominium, and the term “countrywide” refers to the 50 U.S. states plus the District of Columbia.

The study looked at the frequency of claims and the average cost—also referred to as the severity—of claims paid by homeowners insurance companies across the country. According to the study, all of the rise in average costs per insured home was due to growth in the average claim severity, which grew at an annualized rate of 7.8% from 1997 to 2013, or m…………… continues on Cost of homeowners insurance claims increases at 2x rate of inflation – PropertyCasualty360

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