Skip to main content

Rising Insurance Premiums Impact Senior Homeowners

Katie Jensen
Jul 22, 2021

Simply by monitoring, reviewing, and adjusting their insurance policy, these homeowners saved $751 annually.

KEY TAKEAWAYS
  • Increasing home insurance premiums disproportionately impacted homeowners with FICO scores below 580.
  • Home insurance premiums are on the rise nationally and grew an average of 4% year-over-year.
  • Homeowners with a FICO score below 580 experienced rising insurance premiums reaching 6.4%.
  • Premiums for seniors fail to drop because many fail to regularly check policies and annual premium increases.

Insurtech platform, Matic, released its mid-year premium trends report revealing that increasing home insurance premiums disproportionately impacted homeowners with FICO scores below 580. 

According to the 2021 mid-year report, home insurance premiums are on the rise nationally and grew an average of 4% year-over-year. However, homeowners with a FICO score below 580 experienced the largest increase in rising insurance premiums reaching 6.4%. This impacted homeowners by an extra $85 per year on average for a 12-month policy.

Ben Madick, co-founder and CEO of Matic Insurance, said, “In most states, an insurance score, which is partially driven by a credit rating, represents the probability of a claim being filed, and affects the premium a homeowner will pay for coverage.”

Rising Coverage A correlates to the overall increase in home insurance premiums. On average, Coverage A increased 6.3% year-over-year. Yet, homeowners with FICO scores below 580 saw a sharper increase of 9%.

“The housing market, the cost of materials, and the cost of labor were on the rise even before COVID-19,” Madick continued. “We're now seeing those increases reflected in the estimated replacement cost of the home (Coverage A), which ultimately drive increases in insurance premiums, among other factors. While homeowners with lower FICO scores experienced a disproportionate increase, they are receiving better coverage and the gap between premiums and Coverage A is closing.”

Although senior homeowners do not have the highest average premiums, they are the most likely to overpay and have a significant opportunity to save. The report found that homeowners over the age of 63 are the most susceptible to overpaying for home insurance. 

Matic’s data shows that average premiums tend to be the highest for those between 43 and 55 years old. But premiums for seniors fail to drop proportionately because many fail to regularly check policies and annual premium increases, adding up over time. Simply by monitoring, reviewing, and adjusting their insurance policy, these homeowners saved $751 annually. 

The study shows that 40% of homeowners have not reviewed their policy in the last two years. That is why Matic created RateReview. "We created RateReview, an insurance monitoring service, to help homeowners avoid overpayment and ensure they have the right policy,” Madick said. 

For more information visit the Matic website.

 

Published
Jul 22, 2021
NAMMBA Announces Partnership With Clear Capital

NAMMBA announced a partnership with Clear Capital as an important sponsor in their effort to create a more diverse workforce. 

Analysis and Data
Jul 30, 2021
Survey: More Borrowers Sought Mortgages Via Brokers In 2019

CFPB, FHFA Release Latest Results From Survey On Mortgage Application Experience

Analysis and Data
Jul 29, 2021
Profit Margins On Home Sales Decline In Q2 2021

ATTOM released its 2021 U.S. Home Sales Report showing that profit margins for sellers took an unusual dip in the second quarter.

Analysis and Data
Jul 29, 2021
Mortgage Rates Ease Upward

Freddie Mac's Primary Mortgage Survey reported that the 30-year fixed-rate mortgage averaged 2.80% for the week ending July 29, 2021.

Analysis and Data
Jul 29, 2021
LendingTree Reports Large Home Segment Profits In Q2 2021

Home segment revenue of $104.9 million grew 42% from the same quarter last year, producing a segment profit of $39 million, up 1% over the same period. 

Analysis and Data
Jul 29, 2021
J.D. Power: Mortgage Servicers See Significant Customer Satisfaction Gains

With companies seeing record-breaking activity during the COVID-19 pandemic, the real challenge rose for mortgage servicers looking to help homeowners who were facing hardships during the pandemic.

Analysis and Data
Jul 29, 2021