Report Reveals Rising Home Insurance Premiums Disproportionately Burden Seniors and Homeowners with Low Credit Scores
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By Matic
Columbus, OH. – July 22, 2021 – Matic, a leading insurtech platform, today unveiled its mid-year premium trends report, highlighting insights from 36 property and casualty insurance carriers. The results reveal that increasing home insurance premiums disproportionately impact homeowners with FICO scores below 580. Additionally, while senior homeowners do not have the highest average premiums compared to other age groups, they are the most susceptible to overpaying and have a significant opportunity to save.
Since their go-to-market launch in 2017, Matic has been collecting and analyzing insights from their growing digital ecosystem of carriers covering home, auto, and other personal lines of insurance. According to Matic’s 2021 mid-year findings, which reviews trends from 45,000 policies and 3.2 million quotes, 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 the largest increase in rising insurance premiums reaching 6.4%, impacting homeowners by an extra $85 per year on average for a 12-month policy.
Rising Coverage A, or dwelling coverage, correlates to the overall increase in home insurance premiums. On average, Coverage A increased 6.3% year-over-year; however, homeowners with FICO scores below 580 saw the steepest increase at 9%.
| FICO Score | Avg Premium 2019/20 | Avg Premium 2020/21 | % Change | Avg Cov A 2019/20 | Avg Cov A 2020/21 | % Change |
|---|---|---|---|---|---|---|
| <580 | $1,327 | $1,412 | 6.4% | $253,079 | $275,819 | 9.0% |
| 580-669 | $1,237 | $1,304 | 5.4% | $267,207 | $278,197 | 4.1% |
| 670-739 | $1,164 | $1,208 | 3.8% | $291,349 | $306,542 | 5.2% |
| 740-799 | $1,082 | $1,133 | 4.7% | $315,488 | $326,601 | 3.5% |
| >800 | $1,061 | $1,098 | 3.5% | $341,425 | $356,236 | 4.3% |
“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,” said Ben Madick, co-founder and CEO of Matic Insurance. “The housing market, the cost of materials, and the cost of labor were on the rise even before COVID-19. 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.”
Another key finding from the study revealed that homeowners over the age of 63 are the most susceptible to overpaying for home insurance. According to Matic’s data, while average premiums tend to be the highest for those between 43 and 55 years old, premiums for seniors fail to drop proportionately. The data suggests seniors are overpaying due to not regularly checking their policies and annual premium increases adding up over time. Matic found homeowners over 63 saved an average of $751 annually simply by monitoring, reviewing, and adjusting their insurance policy.
| Age Bucket | Avg Premium 2020/21 | Avg Cov A 2020/21 | Avg Savings 2020/21 |
|---|---|---|---|
| <27 | $919 | $206,747 | $329 |
| 27-34 | $1,047 | $259,399 | $389 |
| 35-42 | $1,133 | $299,368 | $454 |
| 43-55 | $1,243 | $319,186 | $625 |
| 56-62 | $1,221 | $313,433 | $573 |
| >63 | $1,183 | $298,88 | $751 |
“Many factors contribute to finding extensive savings. Home improvements and bundling auto might play a role, but the most common occurrence is from a customer that has lived in the same house for over 20 years,” said Madick. “Even without claims, a homeowner will likely experience a 3-4% increase in premiums each year. Over time, that increase is not insignificant.”
Industry studies have shown 40% of homeowners have not reviewed their policy within the last two years. Periodic monitoring can help homeowners keep a pulse on their rate and changing coverage needs.
“Matic has always been an unbiased platform and we believe insurance should be transparent for all homeowners,” said Madick. “We created RateReview®, an insurance monitoring service, to help homeowners avoid overpayment and ensure they have the right policy.”
Matic’s proprietary insurance technology allows home and auto owners to shop online or work directly with a licensed advisor. With coverage in all 50 states and over 40 A-rated carriers available through their marketplace, Matic provides comprehensive property and casualty insurance for consumers beyond home and auto, such as umbrella, flood, earthquake, RV, motorcycle, and more.
*Methodology: Home insurance premiums and Coverage A by FICO are an average from a random sample of 45,000 policies and 3.2 million quotes analyzed from June 1, 2019 through May 31, 2020 and June 1, 2020 through May 31, 2021. Savings by age is based on the difference between current policy and new policy sold between June 1, 2020 through May 31, 2021.
About Matic
Since 2014, Matic has changed the landscape of the insurtech industry by integrating insurance within the home and auto ownership experience. Today, Matic’s digital insurance marketplace has over 40 A-rated home and auto carriers, as well as distribution partners in industries ranging from mortgage origination and servicing to banking, real estate, and personal finance. With a single-minded focus on advocating for policyholders, Matic has created an effortless and transparent comparison-shopping process, saving customers days of work and over 30% in premiums each year.
