PERSONAL LINES
HOMEOWNERS’ FORM AND ENDORSEMENT CHANGES COMING IN 2022 MULTISTATE FILING In this historic home buying market, it can be easy for buyers to get overwhelmed or miss vital steps in the buying process. As an insurance agent, you can help buyers stay on track by educating them on topics such as the insurance impact of a home inspection and weather or resiliency risks for a potential property. Buyers will be focused on putting together a competitive offer, not on the potential need or cost of specialty insurance. However, it’s important to also help buyers understand whether the property they are interested in buying requires specialty coverage prior to purchase. When you talk with buyers to determine what type of coverage they need for their home, discuss the factors that go into calculating the possible rate. It is also important to discuss how variables, such as the type of home or intended property use, could impact the need for specialty coverage. Here are four other ways that agents can help buyers understand different types of specialty coverages for their new home: 1) Discuss how planned occupancy impacts coverage. Buyers are focused on trying to secure the home of their dreams in an extremely competitive housing market, which could take their focus away from what coverage the property requires. Begin by explaining how the planned home occupancy can impact what coverage the buyers will need. For example, if the home will be their primary residence, buyers will probably be eligible for a traditional homeowners policy, which would cover the home structure, personal belongings and more. However, if the buyers plan to rent the home, they need to consider other options, such as a dwelling fire policy. You can also educate buyers on 16 | JANUARY 2022 |
wisconsin INDEPENDENT AGENT
additional coverages like temporary or occasional rental coverage, as well as topics like liability limits and medical payment coverage. This coverage could help protect owners if renters are injured during their stay. Also, discuss whether the buyers plan to list the property as a rental on platforms like Airbnb because there are often challenges in securing short-term rental coverage for the property. While it’s more difficult to secure short-term rental coverage for these kinds of properties because of the high traffic rate of renters compared to renting a home for a longer term to one party, it may be available as specialty coverage. 2) Review the different types of homeowners coverage. Buyers may overlook things that could impact their eligibility for standard homeowners coverage. Explain what factors go into determining coverage, such as the location of the home, age of the roof, whether or not there is a pool, and other conditions that influence price, coverage type and coverage amount. Some of these factors, such as age, location, or claims concerns, could require specialty coverage. Insurance agents know there are different types of homeowners coverage that can cover dwelling and personal belongings as well as different home types—but buyers might not think of that. Buyers might not know that there are different types of homeowners coverage for condos, manufactured, mobile and single-family homes. Also, ask buyers if they are planning any renovations. If so, you can explain how the value change can be contemplated in the replacement cost calculation for homeowners insurance.
