American Strategic Insurance Corporation submitted a request to the Michigan Bureau of Insurance in August 2017 to increase the premiums for its homeowners insurance customers in the state by an average of 14.4%.
The filing was approved in September 7th. The changes will be effective for policies written for new customers in Michigan on or after October 3, 2017. Policyholders will be affected on or after December 3, 2017, should they choose to renew their policies.
American Strategic Insurance Corporation proposed rate impact
Premiums are estimated to increase for 16,335 policyholders in Michigan by an average of $62 per policy. As with most increases, though, the impact will be spread unevenly, with some policyholders receiving increases lower than that figure and other receiving larger hikes. In percentage terms, the company reports the proposed rate change will range from 6% to 18%.
As of 2016, the American Strategic ranked 38th among home insurance carriers who are active in the state. The company moved up in the rankings compared with 2015, when they ranked 70th among companies for market share in the state. The Michigan homeowners insurance market is highly concentrated. State Farm Fire & Casualty Company, while commanding more of the market than any other carrier, still holds only 17.9% of all policies in the state. American Strategic is a very small player in the Michigan marketplace, with 0.3% of the homeowners market share.
Comparing rate changes
These hikes are among the highest rate increases to go into effect for homeowners insurance in Michigan in 2017. Among the 14 largest companies in the state, 12 have been approved for rate changes by regulators. The average increase in premiums arising from those decisions is 1.5%. Within the approved list, the largest hikes were for Farmers Insurance Group (with an average increase of 8.3%); Michigan Farm Bureau Group (4.0% on average); and Chubb Limited Group (4.0% on average).
When compared to the rest of the U.S., homeowners in Michigan enjoy some of the cheapest home insurance. Premiums are 20% cheaper than the average premiums for homeowners in the country as a whole, with Michigan policyholders facing an average annual fee of $865 to insure their homes. That annual tab translates into an average monthly cost of $72 for our sample homeowner.
Michigan's neighbors, Ohio and Wisconsin, are on the the cheaper end of the spectrum. Our benchmark homeowners would be facing paying a monthly average of $66 and $57 respectively. However, in Indiana, a downstairs neighbor of Michigan, our benchmark homeowner pays a more expensive average of $79 per month.