The unusual, scary, shocking side of home insurance statistics
The home insurance industry is filled with endless unusual, shocking and sometimes scary statistics and stories. To many consumers, this kind of information can be amusing, startling or alarming. The wise homeowner, however, knows that information such as these can come in handy when they go shopping for a policy.
In this article, we discuss some of the very interesting statistics that have been recorded in relation to homeowners insurance.
Dog bites and homeowners insurance
In the first half of 2012, the Insurance Information Institute reported that one out of three liability claims for homeowners insurance was in relation to a dog bite. The Institute reported that total liability cost in 2011 for this type of claim amounted to almost $479 million. A major insurance provider, State Farm, recorded over $109 million in payout to victims of dog bites in 2011.
The cost of a claim, on average, increased by 12.3 percent during the period 2010 to 2011. The 2011 average claim of $29,396 was higher than the average figure for 2003 by 53.4 percent. A major factor in the rising claim amounts is the escalation of medical costs related to treatment of dog bites.
Based on a survey by the Agency for Healthcare Research and Quality, individuals who were hospitalized because of dog bites experienced the following: skin and tissue infections, exposed wounds in their extremities, fractures in their upper limbs, fractures in their lower limbs, infective arthritis, septicemia, internal injuries, etc.
In a related note, Forbes.com reported that insurance providers hesitate to provide homeowners insurance coverage for the following types of dogs:
- Siberian Huskies
- Alaskan Malamutes
- Presa Canarios
- Great Danes
- German Shepherds
- Doberman Pinschers
- Pit Bulls and Staffordshire Terriers
Hail storms statistics
According to Live Hail Reports, up to 12,000 hail storms visit the United States each year. The most visited area in the country is known as "Tornado Alley."
One type of home that gets the most damage in a hail storm is the trailer home. Industry experts estimate that total hail damage can reach up to $1 billion annually. Sometimes the amount of damage can be greater. One particular hail storm in 2001 caused extensive damage to Kansas City - it left $2 billion worth of destruction in its wake.
Homeowners whose homes are located along Tornado Alley pay more for homeowners insurance because of hail storms and tornadoes. In Colorado, for instance, half of the premium that a homeowner pays is for coverage against damages arising from hail and tornado disasters.
In addition, insurance fraud in relation to hail storm claims are reported to be on the rise. The National Insurance Crime Bureau recorded a steep increase in fraudulent hail storm claims - a 136 per cent increase from 2006 to 2010.
The latest report published by the Consumer Products Safety Division showed that each year around 25,100 chimney fires take place. These fires result, on average, thirty deaths per year and cost $126.1 million in damages.
Chimney fires are caused by creosote buildup, which is a natural by product of burning wood. There are several factors that speed up the accumulation of creosote in chimneys and these include the use of unseasoned wood and also the location of the chimney.
Annual cleaning of chimneys contributes a lot to the prevention of chimney fires.
Fires that started in the kitchen
Majority of fire related claims on home insurance is related to kitchen or cooking fires. Each year there is an average of 154,700 homes, which get damaged by fires that involve the use of cooking equipment. The overall cost of the damage at the national level reaches $724 million each year.
Frequency of calls on residential fires
The importance of getting home insurance coverage against fires is emphasized by the results of a report published by the National Fire Protection Association in 2009. The report says, fire departments respond to residential fires in every eighty-four seconds.
Clothes dryers and fires
A recent report prepared by the U.S. Fire Administration indicted that around 2,900 fires occur across the country each year which are related to the use of clothes dryers. The report mentioned that an estimated $35 million in property damage take place each year because of the use of this appliance.
Also, clothes dryer fires cause one hundred injuries and five deaths on average each year. These incidents experience a peak during the fall and winter months. A significant factor leading to clothes dryer fires is failure to clean the unit.
Water leaks and damage
The American Insurance Association reported that during the period 2007 to 2009, water leaks in homes resulted to property loss amounting to $9.1 billion. This is equivalent to about twenty three percent of all property losses suffered by homeowners.
The leaks and water damage are mainly caused by freezing pipes and plumbing failures. What is alarming is that the Association reported that the growth of water leaks and damages as components of homeowners insurance is faster than any other component of home insurance. The average amount needed to repair water leaks can be over $20,000 on the average.
One study claims that up to ninety three percent of the damage caused by leaks could be avoided if there is a system in place that detects leaks. The same study claims that an automatic shut off system can also prevent damage.
Flood insurance claims in unlikely areas
The National Flood Insurance Program reported last year that twenty five percent of claims related to flood insurance were in areas where there was low to moderate risk of flooding. Homeowners whose homes are not found near rivers or creeks should therefore not assume that they are safe from flooding.
The standard homeowners insurance policy generally does not include coverage for flood related damage.
Earthquake coverage in California
We know that California has more than the country's share of earthquakes. However, less than twelve percent of its homeowners who have fire insurance coverage also carry coverage for earthquake damage. This is based on information generated by the Insurance Information Network of California.
Trampoline and home insurance
There was a time when trampolines where not covered in a regular home insurance. However, the rapid increase in homes that have trampolines along with the increase in trampoline related injuries rise prompted insurance providers to offer this coverage for additional premium payments.
If there is a trampoline in your backyard and your child's friend came over to play in it, you have to be sure you are properly covered in case of an accident. Injuries arising from trampoline use have exceeded those that are a result of playing in backyard swimming pools. The nation's overall cost to treat trampoline related injuries have average more than $270 million a year.
Calls to your provider can increase your premium
Now we come to the part where we deal with alarming information about home insurance. This information can be scary because it relates to an increase in premiums and the policyholder is caught unaware of the reason for the hike.
In situations where the home gets damaged for whatever reason, the normal reaction of the homeowner is to check with the insurance carrier if such damage is covered under his policy.
A short phone call is usually enough to get the needed answers.
When the homeowner decides against making a claim because coverage is lower than his deductible, he should not deem the matter as closed. The insurance provider will most likely record the query and the details of the damage suffered even when no claim was made. The matter will be reported to the company, ChoicePoint, which manages the maintains the database for Comprehensive Loss Underwriting Exchange. Each homeowners CLUE report contains the details of losses that are reported on homes and also losses reported on the homeowner (in relation to liability damage). These entries stay on the report for as long as seven years.
Generally, a single phone query will not give problems to the homeowner. However, a number of similar queries can lead to a higher premium the next time the homeowner has to renew the policy. In some instances, multiple queries on damages can even lead to a nonrenewal of policy by the insurance carrier.
What makes the matter scarier is that there is not much that the policyholder can do over such entries. Once a call is recorded, it stays on the CLUE report.