Home Insurance and Changing Coverage

Does your home insurance policy ever change? Many people may be inclined to think policies don’t change, but they do. In fact, home insurance policies change all the time. Coverage is added or removed and underwriters determine that something isn’t a risk or is a huge risk much more frequently than you know.

An example of a coverage which has become widely available on most home insurance policies is identity theft coverage. Only a few carriers offered this 10 years ago. In the wake of the hacks of the Yahoo, IRS, and other websites, identity theft coverage is an option many homeowners may want to add to protect themselves from the costly process of getting their identity back.

There are several new options home insurance companies recently added, or are testing, and more in the works that will provide some nice coverage worth considering. I expect many of these to become standard offerings on most policies.

Airbnb: Is renting a room for a weekend or longer a commercial enterprise? Home insurance companies are grappling with what coverage to offer and under what terms or conditions it will be offered. Allstate is testing this in six states (see https://wiseinsurancegroup.com/home-insurance-short-term-rentals/) and I expect this to become a standard offering for many carriers over the coming 12 to 18 months.

Drones: One of our company’s offers optional coverage for personal drones which protects the homeowner against property damage if their drone crashes on a neighbor’s home and damages it. It also provides liability coverage if the neighbor’s privacy is violated while flying the drone.

Mechanical Breakdown: Another of our carriers recently added optional coverage for mechanical breakdown often referred to as home warranty. This option covers heating and air conditioning units and may be expanded to include coverage for other appliances including refrigerators, washing machines, and dryers. The coverage may not replace a completely failed unit, but it will help defray the cost of a significant repair.

Smart Homes: Most home insurance companies are evaluating and testing what does it mean to have a truly smart home that adjusts thermostats, turns lights on or off, sees who’s at the front door, and more. The biggest advantage many companies see is having sensors that turn off the water supply line to the home in the event of a water leak. Such a device could easily mitigate a water leak claim reducing the amount of damage to the home. I’m not aware of any company that provides a discount for such a technology, but I believe that will happen.

Could heat sensors determine there’s a home fire and notify the fire department. What about sensors that go beyond sounding an alarm and providing video footage to the policy to notify of a break in or medical emergency? It will be interesting to see what insurance companies do with smart homes and what discounts or options they’ll over the coming year or two as they conclude their testing. There are also a number of privacy issues which must be addressed before coverage is offered or accepted.

What coverage do you want to see? Share your ideas, suggestions, and questions with me on my Facebook, Google +, and LinkedIn pages. I’d love to hear from you!

Evie Wise
Evie Wise


Evie Wise
Evie Wise

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