Homeowners rates inch up in 2004.Homeowners premiums are expected to rise only 2.8% in 2004, marking the smallest increase in five years and a return to stability after several years of disastrous underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. results, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the Insurance Information Institute. The average cost of homeowners coverage rose to $608 in 2004 from $591 in 2003, compared with $550 in 2002. Robert Hartwig, III's senior vice president and chief economist The Chief Economist is a single position job class having primary responsibility for the development, coordination, and production of economic and financial analysis. It is distinguished from the other economist positions by the broader scope of responsibility encompassing the , attributed the flatter rate increases to moderating claims costs and a modest decrease in claims frequency. Between 1990 and 2002, the ratio of losses to earned premiums Earned premium is the portion of an insurance written premium which is considered "earned" by the insurer, based on the part of the policy period that the insurance has been in effect, and during which the insurer has been exposed to loss. for homeowners insurance was $1.17 in claims paid for every $1 earned, according to III statistics, with unprofitable underwriting reaching a fever pitch fever pitch n. A state of extreme agitation or excitement. fever pitch Noun a state of intense excitement Noun 1. between 2000 and 2002, as homeowners insurers paid out $13.5 billion more in claims than they collected in premiums. However, by 2003, underwriting results came closer to break even, with $1.03 in claims paid for every dollar in earned premium, Hartwig said. Hartwig also said that, since 1990, insurers have paid out more than $120 billion in catastrophe-related losses. He pointed out that many homeowners in coastal regions are made to pay higher deductibles, usually tied to a percentage of the insured value of the home, due to their greater exposure to hurricanes and other potentially devastating dev·as·tate tr.v. dev·as·tat·ed, dev·as·tat·ing, dev·as·tates 1. To lay waste; destroy. 2. To overwhelm; confound; stun: was devastated by the rude remark. catastrophes. Average Consumer Expenditures on Homeowners Insurance 2004 $608 2003 $569 2002 $532 2001 $520 2000 $508 1999 $488 1998 $481 1997 $455 1996 $440 1995 $418 Source: Insurance Information Institute Note: Table made from bar graph. |
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