Homeowners Coverage Consultant

Homeowners Coverage has historically been the best value for the insurance dollar. However, the recent run of large catastrophe claims for windstorm, flood and fire has changed the landscape for this traditionally value-packed protection. In many coastal areas, companies have either cancelled or non-renewed long-time policyholders or they have dramatically raised rates while scaling back on coverage and imposing high deductibles.

Agents who place Homeowners Coverage must be on top of the changing landscape or they will find themselves on the wrong side of an uncovered claim. The best practice is open and honest written communication to the client when a company has issued a non-renewal or limited coverage in some significant way. Agents should be on the lookout for new companies that can replace or augment their coverage offerings.

Agents should have a system to review each policy as it renews to be certain that coverage limits reflect any changes or additions to the property. Automatic Inflation Guard increases should be checked against the actual increases in local construction costs. It may be recommended that an inspection should be periodically done by an independent qualified inspector. Where flood and earthquake coverage is appropriate, it should be offered to the customer in writing. And Personal Liability limits should be written at levels that support the policyholder’s financial condition.

Agents who ignore their duties in this area can expect a crushing blow from E&O litigation, especially in the event their books of business are impacted by a large catastrophe.