Coronavirus and home insurance: What's the impact?

Mon Apr 06 2020

A women sits on her couch with her dog

Maintaining the basics in your life right now is probably top of mind, and you’re not alone. Most folks are wondering exactly how stay-at-home orders will play out financially and affect necessities and household bills such as home insurance.

It’s estimated that 47 million people will lose their jobs or be furloughed during the coronavirus pandemic, and the US could see an unemployment rate of at least 32 percent.

With those projections on the horizon, will home insurance be impacted? Some variables could affect costs, payments, and claims down the road. Here’s our take.

Will COVID-19 raise home insurance premiums?

We haven’t seen anything like the coronavirus pandemic in our lifetimes, so we can’t model how this pandemic will affect home insurance premiums (yet). The closest comparison is the 1918 flu pandemic that infected one-third of the world’s population – about 500 million people – and killed more than 50 million people (675,000 in the United States).

But remember, in 1918, we didn’t have flu vaccines, antibiotics to control secondary infections, or pharmaceuticals to help. Science has come a long way since then, and we are in a much stronger position to combat the disease.

That’s a long way of saying, in the immediate future, that could actually mean less risk from a home insurance standpoint. Most folks are at home if they are able, which reduces some risks. For example:

  • Fewer break-ins and burglaries may occur because many people are at home.
  • Homeowners can address incidents like bursting pipes faster.
  • Fewer liability claims may occur because people aren’t visiting each other’s homes.

That said, the temporary dip in risk likely won’t reduce home insurance premiums in the long term.

There’s also the flip side: pandemic stress that spurs an economic recession could lead to more insurance fraud, which tends to drive up insurance rates. Some studies show insurance fraud rises during economic downturns.

There’s also the chance of civil unrest during uncertain times. While most homeowners' policies cover damages and losses from civil unrest, an increase in these types of claims could mean premium increases.

Again, all of this is conjecture. Only time will give us the information we need to analyze the pandemic’s impact on the industry at large.

How does coronavirus affect homeowners insurance payments?

If you’re a homeowner who has experienced financial hardship because of the pandemic, you may have concerns about making payments for bills like your mortgage and insurance.

Here’s what you should know.

The National Association of Insurance Commissioners has asked all states to implement continuity plans for consumers. Every state is addressing the pandemic slightly differently, so it’s important to look at the specifics of where you live. For example, California is offering a 60-day deferral for premium payments – no one can be canceled for non-payment during this period.

For those concerned about making payments, reach out to your insurer and ask about your options. Most carriers, including Kin, are willing to work with you during this time if you’re experiencing hardship. We’re all in this together.

How will home insurance inspections be handled while sheltering at home?

If you need to buy home insurance right now, whether you’ve just bought a new home or you’re shopping for a better policy, you might need to have a home inspection as a condition of the policy.

Understandably, you probably don’t want to break safer-at-home mandates to have an inspection done in your home. Luckily, carriers like Kin offer “self-serve inspections.” All you need is a smartphone to take photos of your home.

Exterior-only inspections may also be an option during this time.

How will claims be processed during the pandemic?

Life happens even in extraordinary times. So while we hope you don’t experience a claim, know that you won’t be left in the lurch if you need to draw on your coverage during the pandemic.

As soon as you experience damage, do what you can to mitigate the damage (e.g., shut off the water if your pipe bursts), and call us. We offer virtual inspections to limit the number of people in your home and to speed up processing. Essential workers like plumbers are still able to work, and we will help you sort out the next steps to get your covered repairs underway.

What can homeowners do to save on home insurance right now?

Many Americans may experience financial duress because of the coronavirus pandemic. To put yourself in a good position to save money on home insurance, you might consider:

  • Shopping around for a new policy. Take the time to see if your current insurance is the best possible price. Many homeowners don’t realize that the insurance recommended by their real estate agent or mortgage lender isn’t always the best-priced policy. Those policies that you started with may not even provide added coverage such as hurricane insurance. We’ve found that homeowners who switched to Kin save an average of $500 a year.
  • Making your home safer. Things like water leak detection devices, smart home security systems, and fire alarms can reduce your home’s risk exposures. By investing in things that make your home safer, you are reducing the risk of loss and become eligible for homeowners insurance discounts.
  • Increasing your deductible. Higher deductibles reduce premiums because your insurer will pay out less for covered claims. Just make sure you only take on a deductible you can comfortably spare with little notice. See if moving from a $500 to a $1,000 deductible will make a difference.
  • Asking about discounts. Every company offers discounts – make sure you get as many as you’re eligible for. Ask us about discounts when you get a quote.

It’s hard to know what the future holds, but one thing is certain: taking care of your health and your family is just as important as it’s ever been. Take comfort where you can find it. Control what you can to make your home safer. Ask for help when you need it. We’re just a phone call away: 855-717-0022.

Thanks for doing your part to help flatten the curve.


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