May 3, 2020

Can you Buy Home Insurance During the Coronavirus Pandemic?

• Buying Home Insurance during the current pandemic is still possible in much of the United States.
• Processes have been slightly changed.
• Nothing is guaranteed right now.

This article about coronavirus and home insurance is intended for a US audience.

How does Coronavirus or Covid-19 affect the acquisition of a new home insurance policy during this current Pandemic?

To purchase home insurance in California, most consumers contact either their existing or a new insurance agent or a direct to consumer insurer to being shopping for a policy. The agent often meets the consumers in person to begin “quoting” out their options. The client may meet or speak via phone several times until a solid option is discovered and agreed upon. They consumer and agent may meet again to sign the insurance application and quote. From there typically the policy will be paid for and created. A declarations sheet will be sent direct to the consumer, who is now a client. A duplicate copy of the declarations sheet may also be sent to any mortgage company on record.

Often after this step an “In Home Inspection” may be completed the insurer. This is either performed by the insurer or a third party inspection company.

At the same time to client may begin setting up access to an online account to take care of setting up future payment modes and methods as well as notifications of account changes.

That is a common scenario that played out BEFORE the current pandemic.

The Issues with the Old System of Home Insurance Purchase with the Coronavirus Pandemic:

There are multiple issues as the publication of this blog post:

1. Consumer and Agent may no longer be able to meet in person
2. Difficult for consumers to sign documents in person.
3. Home Inspection can more than likely not be done in the method that it used to commonly be done.
4. Insurer and Agency Back Office Issues, such as staffing and payment processing.
5. Potential Coverage Issues.

It is not possible for this list to be comprehensive as we are still going through this. However these are the biggest five issues that I have noticed as of the writing of this article (May 2nd, 2020.)

Can’t Meet in Person – No Problem:

My insurance agency, Marindependent, sadly rarely meets consumers in person any more. Generally this is because my clients are rather comfortable conducting business by phone and or email. However other agencies have greatly struggled with this.

However its clear that the solution to this problem is conduct the meetings over Zoom, Phone Call, and Email.

Electronic Signatures are Easy to Use:

Most insurance agencies, at least modern ones, have moved to E or Electronic Signatures in the past several years. They are a huge benefit to all involved, and the environment. E sigs easily solve the social distancing issue.

The Coronavius Home Inspection Conundrum:

Home insurers have several options for inspection and appraisal when a new client comes on board. Generally their options are the following:

1. Insurer can opt to do and / or say nothing.
2. Insurer can do a drive by inspection, often (but not necessarily) unannounced. This may or may not lead to option 3. They will only view the property from public land.
3. Insurer can schedule an in home inspection on a date of the clients choosing.

Option three seems undo-able right now with the social distancing requirements. How are insurers handing this right now? I would generally say that most carriers are either opting for either not doing an inspection or just the drive by version. Some carriers have state that they do inspections, potentially, at a later time. When it is uncertain.

That being said, I have not yet heard of a policy that cannot be done because of a lack of an inspection mechanism. However, it probably has already happened, but we do not know about it.

Back Office Issues with Insurers During the Pandemic:

While insurers have done, in my opinion, a fairly good job navigating the work from home requirements, I can notice some things not working as well as they have the past. One thing of particular note is the delay in mail being opened. From my standpoint, I would suggest to all consumers to pay via electronic means rather than opting to pay via physical check.

I have also noticed, with some carriers delays in underwriting, and this is well understood.

Coverage Issues with the Pandemic on your Future Home Insurance Policies:

This is mostly a footnote as I believe it likely that issues with the standard policy form could occur. Its speculative, perhaps too much so. However the commercial policy form is struggling with how to handle the current coverage situation that is caused by a virus. How will this work with a new home insurance policy, I cannot say.

How to Get Home Insurance During the Coronavirus Pandemic?

As of the writing of this article it is still eminently possible to procure a new home insurance policy. The following suggestions and tactics may help:

1. Pay for your new home insurance policy via electronic means.
2. Be comfortable speaking to your agent over Zoom or Phone Call.
3. Expect to hear background noise during your meeting. Remember there is no school is much of the country.
4. Expect a slower response from everyone involved, so plan for it.
5. Follow up on your policy with insurer and agent to confirm everything is in order.
6. Expect a home inspection/ appraisal at a later time
7. Sign your documents electronically.

So yes you can still buy a new home insurance policy during the coronavirus pandemic and lock down.