The Coronavirus outbreak has disrupted nearly every aspect of our daily lives. But does it have any effect on homeowners' insurance, too?
While the ongoing health crisis does not wield any direct impact on the structural integrity of our homes and other properties, some variables could affect the costs, payments, and utilization of home insurance coverage.
Below, we have answered some of the most frequently asked questions regarding the COVID-19 pandemic and home insurance.
Will COVID-19 affect the rate of home insurance premiums?
Frankly speaking, it’s too early to tell whether or not the pandemic is going to have a lasting effect on homeowners' insurance premiums.
The fact that most of the population is staying at home could mean reduced risk from a home insurance standpoint. There are fewer break-ins nowadays; incidents like leaks or accidental flooding are addressed promptly because there are people at home 24/7.
These factors, however, may not be enough to lower the rate of home insurance premiums. Moreover, the looming possibility of civil unrest during these uncertain times could lead to more damage claims and, consequently, higher premiums.
Since we haven’t experienced anything like this in our lifetime, we need more time to know for sure how the current events will play out and eventually impact the insurance industry.
How are home insurance inspections handled while in quarantine?
Maybe you bought a new home, or you're just shopping for a new policy -- whatever the case, you might still have to go through an inspection when purchasing homeowners insurance right now.
Don’t worry, though, because you don’t have to break social distancing and safer-at-home mandates to comply with the conditions of buying a policy. Most home insurance companies now offer self-serve inspections. You only have to take photos of your home and send it to them for assessment.
Do I need to increase my home insurance coverage during the pandemic?
The Coronavirus does not directly affect your home and personal property, so your current insurance coverage should be sufficient for the most part. The pandemic, however, does impact the amount of time that people spend at home and in their neighborhood, which increases the risk of accidents.
Online shopping, food and grocery deliveries – these are the new normal. Say, for instance, the pizza delivery guy slips and sustains a bad fall while on your property. He can file a claim against you, and the liability costs could be steep. That said, higher liability coverage would come in handy these days.
Also, if COVID-19 has you working remotely from home for the first time, you might want to check how much of your business assets are covered by your homeowners' policy. Most policies cover up to $2500 in home-office equipment. If you think you own more than that amount, consider a home business endorsement or an altogether separate policy for business equipment.
How are claims being processed these days?
Chances of filing for a home insurance claim while navigating this pandemic are slim, but just in case you have to, know that it’s a pretty hands-free process.
Even before the COVID-19 outbreak, insurance companies have already been implementing online claims processing. Now, in the face of this pandemic, virtual claims have become the new norm. All you have to do is sign in to an app or website, write up a report, upload photos and videos as proof of loss or damage, and await reimbursement.
Still, companies may sometimes insist on sending adjusters to your place but only for more substantial claims.
What happens if I can't make insurance payments on time?
Many people are experiencing financial duress because of the Coronavirus spread, rendering families unable to maintain their usual lifestyle, much less, pay for home insurance coverage.
If you’ve been running on a tight budget lately, you can reach out to your insurer and ask about possible options or payment arrangements. In light of the current crisis, most insurance carriers are offering temporary payment suspensions or 60-day payment deferrals to their clients.
Should you find yourself still struggling to make payments after the grace period, you may consider reducing your coverage but think long and hard before canceling it altogether. If you have a mortgage, then cancellation is not an option. Even if you don’t have a mortgage, though, remember that not having homeowners’ insurance can leave you without a safety net and in dire financial straits in case of liability lawsuits or home and property damage.
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