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 canceled 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 who assume the duty to advise should have a system to review each policy periodically to be certain that coverage limits reflect any changes or additions to the property. It may be advisable to recommend that a client have a periodic inspection of the property done by an independent qualified appraiser to assist with establishing reconstruction values. Where flood and earthquake exposures exist, coverage should be offered to the customer in writing. And Personal Liability limits should be offered with limits that support the policyholder’s financial condition.
Agents who ignore their duties in this area can expect E&O litigation. And in the event their books of business are impacted by a large catastrophe, agents who are exposed in these areas run the risk of being sued out of business.
Michael Sapourn has been involved in the insurance industry for close to 30 years, first as an Agency Principal and CEO, running one of the largest insurance agencies in the Washington, DC area. Mr. Sapourn has extensive experience in the industry from the inside out.
Mr. Sapourn is available as an Errors & Omissions consultant to insurance customers, E&O Insurance Carriers and their agents. Make sure that your clients, and YOU, are fully covered when things go wrong.
The insurance industry is changing. Stay on top of the changes and protect yourself or your client. When you need a Homeowners Coverage Expert you can do no better than Sapourn Insurance Consultants. Contact us today!