Homeowners Insurance to Value--An Update

Homeowners Insurance to Value is a sometimes-forgotten, yet critical, factor in the ratemaking process. Some aspects of Insurance to Value have remained the same while others have changed. Actuaries must consider the impact of Insurance to Value, which can change quickly, as a part of their Homeowner ratemaking analyses. A relatively new coverage which, under certain conditions, provides dwelling coverage beyond the ful1 policy amount is one example of how today's Homeowner insurance marketplace is now different than previously when 80% coinsurance was the most common benchmark. This paper discusses these developments and provides guidance and examples of reports and methods by which to monitor and measure ratemaking impacts. The paper is written so that a student or an actuary new to Homeowners Insurance should gain practica1 insights without being burdened with difficult technical demands.