Covid and the Homeowner Policy

Covid and the Homeowner Policy

Covid and the Homeowner Policy: what you need to know

The coronavirus pandemic won’t affect your homeowners insurance too much, but there are a few coverages that could be impacted because of the temporary lifestyle change. Companies are also offering flexible payment options due to financial hardship.

KEY TAKEAWAYS

• The coronavirus won’t affect your ability to acquire homeowners insurance or re-shop your current policy for lower rates
• The coronavirus won’t directly affect your homeowners insurance coverage or servicing of your policy
• With kids home from school and parents working from home, your liability coverage and business property coverage may come in handy
• Expect a more “remote” insurance claim process

Homeowners insurance is a type of financial protection that covers your home, personal belongings, and additional living expenses in the event the house is damaged or burglarized. It also covers legal expenses and medical payments if you’re held liable for an accident.
If you’re reading this, you may be wondering how, if at all, the coronavirus, or COVID-19 pandemic impacts that coverage. The deadly virus has penetrated nearly every corner of the globe and impacted just about every industry — namely certain kinds of financial protections like travel, life, auto, and disability insurance. But is your homeowners insurance affected?

The answer is, sort of. The changing circumstances definitely highlight the need for existing components in your policy like liability coverage; in addition to coverage enhancements like a home business coverage endorsement if you moved your business to your house. From a claims standpoint, insurance companies may no longer send an adjuster to your home, so you may see a greater reliance on photo and video claim evidence, at least in the near future.

Covid and the Homeowner Policy: How the coronavirus impacts new homebuyers who need coverage

The COVID-19 pandemic has impacted certain aspects of the homebuying process. On one hand, if you’re looking to buy a home and have decent job security, now may be as good a time as ever to apply for a mortgage — the crisis has indirectly led to some of the lowest interest rates in history. On the other hand, millions are now unemployed and may be unable to afford mortgage or homeowners insurance payments.
Many lenders and loan servicers are offering payment suspensions and extensions to accommodate borrowers.
Similarly, homeowners insurance companies are offering payment solutions of their own for existing policyholders and new home purchasers who need coverage to satisfy mortgage requirements but can’t afford to pay the monthly or annual premium because of COVID-19–related financial hardship. If you’re shopping around for coverage and find a policy you like but you’re unable to afford the quoted premium up front, don’t let that be the end of it — reach out to the insurance company and see if they offer any payment accommodations for those impacted by the current crisis.

The importance of social distancing also may impact home inspections — one of the final steps after you get approved for homeowners insurance.
Normally, the insurance company will send over an inspector, or adjuster, to perform at least an exterior inspection of the home to check on its condition for the purpose of coverage or rate adjustments. But in some cases, an interior inspection will also be required, especially if the insured property is older or has a history of water damage or mold-related loss.
Insurance companies appear to be continuing interior inspections, but they’re also giving social-distance conscious customers the option to request an exterior-only inspection. Keep in mind that you’ll still be covered if you decline an interior inspection — it’ll simply be made up at a later (and safer) date.

Covid and the Homeowner Policy: How the coronavirus could affect your homeowners insurance coverage

Since your home and personal belongings can’t catch the coronavirus, the property coverage in your policy won’t be impacted. However, the current reality of working from home and kids staying home from school could necessitate more liability coverage or a home business endorsement for your policy.

Additionally, if you’re paying for additional home-sharing coverage for a room or rental property that you’re no longer able to rent out on a short-term rental app like Airbnb or VRBO due to the pandemic, consider pausing that coverage so you’re not paying for something you’re not using. Contact your insurance agent and ask them to put a pause on that coverage.

Personal liability coverage

Personal liability coverage is the part of your home insurance policy that reimburses you for legal expenses in the event that you or any members of your household cause an injury or damage to someone’s property. This coverage is particularly crucial for homeowners with kids or dogs, as any injury or property damage caused by dependents or pets is your responsibility.
With the coronavirus pandemic keeping so many kids home from school and potentially wandering about the neighborhood, it’s especially crucial to be mindful of attractive nuisances — like a pool or leashed dog on your property — in the event that a curious child makes their way onto your property.
If a guest or passerby is injured on your property, you may be covered by personal liability coverage, but only up to the limit in your policy. Be sure to have at least $300,000 in liability coverage. Additionally, if you have a dog, check with your insurance company to see if its particular breed is covered.

Drones and Insurance

damaged-drone-580x387

Love it or hate it, the future includes a lot more drones flying through our skies. The FAA projects that 2017 will be the turning point in the commercial adoption of drone technology. Among hobbyists and amateur drone operators, the future is now. Drones can be purchased on eBay or Amazon for under $50. So you or your child may soon be a drone owner. Here are some drone tips and suggestions for your drone and insurance:

  1. For the drone owner, the prevailing source of insurance coverage is through your Homeowner or Renters policy.
  2. The drone itself is Personal Property under your policy but subject to named perils and the deductible (often $500-$1000) is more than the value of the damaged drone.
  3. Liability coverage to damage done by the drone depends on the circumstances of the accident- especially if negligence is involved. If others are injured or the property of others is damaged by the drone, coverage may be found under the liability coverage of your Homeowner, Renters or Umbrella policy.
  4. Coverage for injury to the operator, the operator’s family or pets would have to be addressed through your medical insurance policy.   If the drone falls from the air and damages an auto, coverage could be found under the comprehensive section of the owner’s auto policy (or if identified, more likely the drone operator’s Homeowners or Renters policy).
  5. All drones over .55 pounds need to be registered through the Federal Aviation Agency. Here is the link to more FAA unmanned aircraft information FAA.gov, including registration. The cost starts at $5.00.
  6. A new company, Verifly, offers on-demand insurance for enthusiasts and commercial drone operators at a cost of about $10 per hour.

Note that we at Johnson & Rohan see insurance for the business of drones, for both commercial and consumer enthusiasts as developing rapidly and evolving.   We suggest giving us a call to review your particular coverage before your next drone launch.