Massachusetts Rejects Mapfre’s Ice-Dam Deductible Request

By | December 17, 2015

The Massachusetts Division of Insurance recently denied a request by Mapfre USA Corp. to add an ice-dam deductible to some homeowners policyholders who previously had multiple ice-dam claims.

Mapfre USA Corp., the largest commercial home insurer in Massachusetts, had asked the Division of Insurance to approve the first-of-its-kind deductible, which would have ranged from $1,000 up to $10,000.

The request was denied earlier this month by regulators who said the insurer’s proposed criteria for applying the deductible was not clear.

Ice dams form at roof’s edge during winter and prevent melting snow from draining properly, which can cause leaks and damage to the structure’s interior. Ice-dam damage was a major problem and contributed to losses for insurers during last winter’s record-setting snowfall in Massachusetts.

“The insurer’s proposed ice-dam deductible had incremental deductible options ranging from $1,000 up to $10,000. An accompanying credit on the base premium was also proposed at incremental percentages,” Division of Insurance spokesman Chris Goetcheus said.

“The Division disapproved of the filing because the criteria proposed to apply the deductible was not clear. Further, whether or not the deductible was applied and at what amount was at the company’s discretion, unlike windstorm or hurricane deductibles which are triggered by an independent third party’s measurement,” Goetcheus added.

Mapfre said that while the company believes the deductible proposal is fair, it respects the regulators’ decision.

“Mapfre Insurance encourages all homeowners to reduce the risk that ice dams pose to their property through preventative home maintenance. To assist consumers, we recently introduced a winter preparedness education campaign showing homeowners how to make their homes less susceptible to ice dams,” said Matthew Wilcox, senior vice president and chief technical officer at Mapfre.

“As part of this effort, we explored the introduction of an ice-dam deductible, which would have been used to provide customers with multiple ice-dam claims an option in lieu of cancellation. The deductible also would have offered a small premium benefit to customers,” said Wilcox. “While we believe the deductible was a fair approach, we respect the Division of Insurance’s decision and do not plan on re-submitting.”

The Division of Insurance earlier this year approved premium increases for a number of large homeowners insurers after a brutal winter led to increased claims activity in Massachusetts. Mapfre, which insures some 215,000 homeowners in the state, was approved to raise home insurance rates by 8.9 percent on average beginning Aug. 1. Safety Insurance, which insures nearly 150,000 homeowners in the state, was approved to raise rates by 9.1 percent on average beginning in December.


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