Working with new homeowners to better understand coverages
Agents also should consider how easy and transparent the buying process is and making sure insureds' policies align with their risks.
During the past year, a lot of first-time homebuyers purchased insurance coverage online, increasing the potential for misunderstandings on what a policy might or might not cover.
“A first-time homeowner might not be thinking about the AC unit in the attic or water heater in the basement,” explained Andrew Leeds, vice president of claims at Plymouth Rock Home Assurance. “In many cases when you have a mortgage, it is required that you buy insurance. But it is just a minimum requirement for what you are purchasing. If you are an uninformed buyer, you might not address every possible scenario that might be covered by another policy.”
The most important thing to get across to new homeowners is to consider the number and value of goods as they transition from renters to homeowners coverage, he said. This is particularly important, as many homeowners fail to update policies when they purchase valuables.
“As a renter, you might have a renters policy with $20,000-$50,000 worth of personal property. As you go to a home, now you are buying more furniture, dishware, outdoor lawn equipment and furniture, so the value of everything you own goes up dramatically,” Leeds told PropertyCasualty360.com.
Truly understanding what’s covered
The other important thing to have first-time homebuyers understand is that they are not only insuring the house but everything on the property.
“If they have a shed or pool — those types of things — it is important they are covered correctly,” he said.
Additionally, conveying regional differences in how coverage is applied and other factors that could impact claims is vital, according to Leeds. He gave an example of a California law regarding joint ownership of fences.
“If we were neighbors in California and that fence falls down, we both have to make a claim. There are quirky things like that all over the country,” he said.
For agents, it is all about knowing who the customer is and what products or companies can best fit their needs. Part of this equation is also making the buying process easy and understandable, Leeds explained.
“One of my pet peeves, if you will, with some other quoting engines is they kind of only give you one path. They don’t lay the options out next to each other, understanding that as you answer the questions, you are taking yourself down a path of buying more or less coverage,” he said. “You have to make it an easy experience, but it also has to be transparent in terms of ‘the choices I am making are adding or removing coverages to the product I am purchasing.’”
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