Once upon a time, staying away from cigarettes could not only have saved your life, but have shaved a few dollars off your home insurance bill, too.
But the nonsmoker’s discount — on average a $50 annual savings on an insurance policy in Massachusetts — has slowly fizzled away. Insurance companies have eliminated or cut back the discount in recent years as the number of people lighting up has dropped, contributing to a sharp decline in smoking-related fires.
Vermont Mutual Insurance Co., a Montpelier-based firm that has more than 60,000 policyholders in Massachusetts, is the latest to roll back the discount. In its recent state filings, the company said that it plans to reduce the discount from 5 percent to 2 percent for policies issued after November and to eventually scrap the program altogether.
The discount has been in place for more than 50 years.
“It’s a legacy thing,” said Dan Bridge, a senior vice president of Vermont Mutual, but times have changed and a smoker-free household simply is no longer a good indicator of fire risk. The company also found that only a handful of comparable insurers still offered reduced prices for nonsmokers, Bridge said.
The nonsmoker discount seems headed for the same fate as automobile insurance discounts for seat belts and air bags, which disappeared as the safety measures became standard equipment. In much the same way, the nonsmoker discount, aimed at rewarding less risky behavior, is vanishing because nearly everybody qualifies for it, said Michael Barry, a spokesman for the Insurance Information Institute, an industry research organization.
Only 19 percent of US adults reported smoking in 2011, the lowest levels since 1965, according to the Centers for Disease Control and Prevention. And only two of the nation’s top 10 insurance companies still offer lower premiums to nonsmokers.
“The discount had outlived its usefulness,” Barry said.
The fewer smokers there are, the harder it is for insurance companies to differentiate the fire risk between customers with a nicotine habit and those without, said Curt Troutman, the vice president of Bunker Hill Insurance, which insures 40,000 properties in Massachusetts and Connecticut. Bunker Hill dropped its 5 percent nonsmoker discount in 2004.
It is also harder to sniff out a smoking habit as more homeowners buy policies online or over the phone, Troutman said. Insurance agents used to drop by a customer’s house to sella plan or sit across a table in their office filling out the forms.
“They could see them and smell them and see if they light up,” he said.
Agents don’t necessarily want to get into the touchy question of asking clients to prove that they don’t light up, Troutman added. Insurance companies instead rely on other factors when pricing these policies, such as age, construction quality of a house, and credit scores.
Improved fire detectors and less flammable materials used in construction and in cigarettes have also helped reduce the fire risk,industry officials said. Between 1980 and 2011, the number of house fires caused by cigarettes and other smoking materials fell by more than 70 percent to 17,600 from 70,800, according to the National Fire Protection Association, a Quincy-based fire prevention nonprofit.
The state Division of Insurance says these trends, aided by continuing improvements in materials, technology, and building practices, mean it’s only a matter of time before the nonsmoker discount is no longer offered on Massachusetts policies.
“Houses are being built more efficiently, smoke and fire detectors are more present in houses, and sprinkler and fire protection tools are more advanced,” said Jayda Leder-Luis, a spokeswoman for the division. “This would be a discount that we might not see anymore.”
For consumers, there are still discounts they can take advantage of to lower the cost of homeowners insurance, such as for installing deadbolts on a front door, filling in a swimming pool, and even passing on a pet. Another way to lower homeowner premiums that is increasingly offered by companies: buy more insurance products from them.
For example, while Vermont Mutual’s nonsmoker discount declined by 3 percentage points, the company is offering more savings to customers who bundle their home and auto policies.
Vermont Mutual’s homeowner supporting auto policy discount increased from 17 percent to 20 percent, according to its recent filings.
“It’s a balance,” Bridge said.