The COVID-19 pandemic has hit the headlines for the majority of the year and although our health and well-being are on the top of our minds, our financial situations are being affected as well.
New homeowners and current homeowners may be worried about how their home insurance policies may be affected by COVID-19’s effect on the economy.
But, there is good news. The pandemic won’t affect new homeowners or current homeowners too much.
What is Home Insurance and How Can COVID-19 Affect it?
When you buy a home it is instrumental to get homeowners insurance as it helps protect your home and any belongings inside your home if a natural disaster or burglary takes place and items are either destroyed or stolen. Another great aspect about homeowners’ insurance is that one can get coverage for extra living expenses and medical expenses if an accident occurs and you are found liable. This could happen if a fire breaks out in your home after accidentally leaving the stove on and it causes burns that need medical attention.
Here are the ways Independent Agent magazine recognizes the shift in homeowners’ insurance due to the Coronavirus pandemic.
- A Shift in Claims: Frequent and minor claims, such as water damage claims, are seeing a rise as more and more people are working from home and water usage has increased. However, larger claims are seeing a decrease due to people being home more often and are able to spot anything out of the ordinary and get it fixed before it becomes a disaster.
- Homeowners Wants are Changing: People’s financial needs are becoming different and any help to save money or have an insurance company work with them on payments is becoming more likely. “A carrier’s response to coronavirus concerns can clearly illustrate whether their current policy is the best fit for them. A financially strong, and personally thoughtful insurer, will acknowledge the current economic hardships of many of its customers. Quality carriers will respond by suspending cancellations for hardship or waiving late fee penalties,” Independent Magazine notes.
- Insurance Agents Line of Work has Changed: Insurance agents, especially home insurance agents, have seen their face-to-face line of work turn to virtual meetings. They also have lost the ability to network and have face-to-face referrals.
Hotels have become a thing of the past with companies like Airbnb allowing people to rent out their properties to people who are on vacation. And due to essentially allowing strangers to stay in one’s property, home-sharing coverage is recommended as accidents may occur. But, with the pandemic ongoing and fewer people taking vacations or business trips, the need for Airbnb has decreased and so has the need of having home-sharing insurance, according to Policy Genius.
They note that because of the pandemic, one should consider, “pausing that coverage so you’re not paying for something you’re not using. Contact your insurer and ask them to put a pause on that coverage.”
Home-Inspections are Changing
In order to get final approval on homeowners insurance, typically an adjuster, or inspector, will come to your home and look inside and outside of the home to determine the coverage you may be approved for. But, because of the COVID-19 pandemic, people do not want strangers in their home and therefore only an exterior inspection may occur. If one declines an interior inspection, they will have to wait until things are safer to get that done.
Although people may be hesitant to buy houses due to financial instability because of COVID-19’s impact on the economy, for those who have a steady income and are able to afford a home, it is good news that homeowners insurance is not affected too much. Insurance companies seem to be working with their customers to adhere to their needs and create payment plans that their customers can afford.