no to deductible for
By Shawn Selby, PropertyCasualty360.com
The Massachusetts Division of Insurance recently rejected a request by the state’s larg- est commercial home insurer
that could have cost customers more
money to deal with damages from winter weather, The Boston Globe reported
Webster, Mass.-based insurer Mapfre
USA Corp. wanted to add a deductible
and require consumers to pay as much
as $10,000 of the costs of repairing ice-dam damage before the coverage kicked
in. It was the first time an insurer has
proposed an ice-dam deductible, which
regulators earlier this month rejected as
vague and unfair, The Globe reported.
The plan would have provided con-
sumers with few protections, leaving it
to Mapfre, as opposed to independent
agencies, to determine whether costly
home repairs were tied to ice dams,
said Chris Goetcheus, a spokesman for
the state’s Division of Insurance. The
ice-dam deductible would have been in
addition to the standard deductible on
The insurance division rarely disapproves rate and related filings by commercial insurers, and that record has
come under scrutiny recently. In early
2015, regulators agreed to significant
premium increases on home insurance,
which the companies blamed on the
mountains of claims they received following last winter’s record snow and
other severe weather in recent years, according to The Globe.
Mapfre, which raised home insurance
rates by an average of about nine percent, said that its ice-dam proposal was
fair, but it will abide by the state’s decision. Mapfre insures 215,000 homeowners in Massachusetts.
Mapfre planned to offer the separate
ice-dam deductible as an option to customers who have had multiple ice-dam
claims in the past few years and whose
policies were in danger of being canceled by the insurance company, Matthew Wilcox, a senior vice president,
told the newspaper.
Under Mapfre’s proposal, if consumers agreed to a $10,000 deductible on
an ice-dam claim, they would receive a
$100 discount on their annual premium.
Homeowners who did not agree to the
deductible would probably not have
been covered for ice-dam damage.
Ice dams became a significant problem in the state last winter as relentless
snows blanketed the area. Ice dams form
on roofs as snow melts and refreezes,
preventing proper drainage and leading to leaks that damage interior walls
and ceilings. Ice dams contributed to the
nearly $1 billion in insurance losses sustained in Massachusetts last winter, The
Ice-dam deductibles are unusual,
but insurance companies have introduced separate deductibles for damage
from wind, hail and hurricanes, Robert Hartwig, president of the New York
City-based Insurance Information Institute, told the newspaper.
Insurance companies tend to introduce separate deductibles for homeowner policies after being hit with significant
losses, Hartwig said. For example, after
Hurricane Andrew hit South Florida in
1992 and caused about $15.5 billion in
insurance losses, companies tacked on
Ice dams form on roofs as
snow melts and refreezes,
preventing proper drainage
and leading to leaks
that damage interiors.
Mapfre USA had wanted
customers to pay as much
$10,000 toward repairs.