Consult our guide to managing homeowners insurance during these uncertain times.
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The coronavirus pandemic has disrupted many aspects of society, but your home insurance policy will continue to function normally.
Continue reading to learn more about how the homeowners insurance industry is helping consumers allay financial uncertainties during the pandemic. However, many people are currently facing uncertainty with their jobs and finances, as well as ways to save money on your homeowners insurance premiums during this challenging time.
It’s hard to say with any degree of certainty what will happen to homeowners insurance rates. There are many factors to consider. First, people are staying home more often these days, which insurance companies generally regard as good, as it reduces the likelihood of theft. Spending more time at home does come with some additional risks, including an increase in kitchen fires or household accidents.
On the whole, home and auto insurance companies are positioned to fulfill fewer claims during quarantine, which could lead to rate reductions. Again, this is speculative, and the state of the economy in the near future will likely play a major role.
Below, you'll find answers to many of the questions that have arisen for homeowners during the pandemic. As always, if you have additional questions, feel free to submit them here.
If you have experienced financial difficulties due to COVID-19, you are not alone. With job losses numbering well into the millions, many Americans are facing much uncertainty about the future. However, state governments and the insurance industry are responding, with many attempting to give relief to those affected.
The National Association of Insurance Commissioners (NAIC) has reported recommendations for states to have a consistent plan of action on how they respond during this crisis. Each state is handling things differently, but most were allowing for leniency in payment deadlines, though it's unclear if they will be extended widely. California, for instance, imposed a 60-day grace period on paying insurance premiums back in the spring, allowing consumers a little breathing room as they navigate this uncertain economic situation. During this time, policies could not be canceled due to non-payment. A number of insurance companies also took measures to provide relief to struggling customers, including Liberty Mutual who extended payment deadlines and waived fees.
However, as the virus continues to spread and cases increase, it's unclear if any further actions will be taken in the summer and fall to provide such relief.
It’s not likely that your homeowners insurance needs will change greatly during this period. However, many are seeking ways to save money due to financial instability. Below are a few suggestions for saving money on homeowners insurance during the coronavirus pandemic.
While many aspects of the pandemic might mirror a natural disaster, the implications on the insurance industry are not the same as they would be for a hurricane or earthquake. During such disasters, insurers are inundated with claims, which could slow down the process of receiving a payout.
While COVID-19 has brought much of society to a halt, property insurance claims are not likely to be affected to the same degree. Most home insurance companies can still respond to claims and help their customers by having a large number of employees working from home. Still, you can certainly expect fewer home visits by most professionals, including claims adjusters, while quarantine measures are in place. Also, if your home is damaged and requires construction work, it could be some time before that work can begin depending on the physical distancing measures taken in your local area.
Many home insurance policies require a home inspection as a part of the agreement. Similarly to how insurers are handling claims, many will now allow for this to be done with a smartphone. Exterior inspections are still likely to take place in most cases, and normal interior inspections are likely to be scheduled for a date in the future.
Your personal liability coverage protects you if you cause injury to another person or damage to their property. With more people at home, it’s very likely that your neighborhood will be much busier with pedestrians than normal. Take precautions to ensure that your property is well maintained and make sure that dogs are kept on leashes, behind a fence or indoors to avoid potential incidents.
With many schools closed, children may be more common in your neighborhood. Take extra precautions to ensure attractive nuisances such as swimming pools, trampolines, and playground equipment are secure to avoid potential injury. You are responsible for injuries related to these items even if you had no knowledge of the uninvited guests.
Food and grocery deliveries are also more common these days. If a delivery person slips and falls while on your property, it’s possible that they could file a liability claim against you. Make sure walkways are clear and well lit to help ensure delivery drivers' safety and avoid unwanted claims.
For the most part, your current insurance plan should be sufficient in most cases. However, working from home and facing shortages of certain household products have thrown many homeowners some curveballs. Have a look at a few endorsements or coverage limit increases that could come in handy during this time.
One of the more unexpected consequences of the COVID-19 outbreak was the rise in sewer backups. With the initial run on toilet tissue and the struggle for many to find it, people resorted to flushing items that had no business being flushed. This shortage has largely been rectified, but adding sewer backup coverage could still be a good idea, as standard home insurance policies don’t usually cover this sort of damage.
Also, as many people have found themselves suddenly working from home, it may be worth considering adding a home business endorsement or — depending on the business type — an altogether separate policy. Adding this coverage can help you in a number of ways, from protecting your technology, clients, or employee records, to covering your business in the event that legal action is taken against your company.
As stated earlier, the likelihood of personal liability claims could increase during this time. It’s always a good idea to have high limits on this coverage, as legal costs can be significant. It’s recommended that your limit be at least $300k, though you should consider an even higher limit if you have significant assets.
Many people are worried about what society may look like on the other side of this pandemic. With uncertainty abounds in the financial sector and staggering job losses, many homeowners are nervous about what additional hardships or costs they might have to endure. If you are having trouble making your payments, speak to a representative from your insurer to see what options are available. Above all, it’s important to make sure that you and your family are adequately protected during these trying times.
The Zebra is not an insurance company. We publish data-backed, expert-reviewed resources to help consumers make more informed insurance decisions.