Real Estate & Homeowners

Homeowners insurance is a form of property insurance designed to protect an individual’s home against damages to the house itself, or to possessions in the home. Homeowners insurance also provides liability coverage against accidents in the home or on the property. In the U.S. there are seven forms of homeowners insurance that have become standardized in the industry; they range in name from HO-1 through HO-8 and offer various levels of protection depending on the needs of the homeowner. 

Market Trends

Homeowners coverage offered by carriers has become more restricted in recent years. Traditionally, homeowners’ policies provided broad coverage for physical damage to homes, including loss from fire, windstorm, theft, and water claims plus broad coverage for comprehensive personal liability. However, carriers have become more discriminating in selecting policyholders, and coverage tends to be less comprehensive. This trend stems partly from adverse loss experiences across the country causing Multi-Billion dollar losses.

Homeowners Coverage Disputes

While homeowners’ policies may intend to provide fairly broad coverage, various policy terms and conditions still result in claim disputes between policyholders, agents, and carriers. Among the common culprits:

• Building codes may significantly increase rebuilding costs.
• Insured did not properly inform the carrier of changes
• Impaired coverage for fire and vandalism due to “Vacancy” of the dwelling.
• Personal liability exclusions and/or inadequate limits.
• Coinsurance penalties applied to Underinsured dwellings.
• Actual replacement cost for the dwelling and/or contents may exceed policy limits.
• Home occupied by someone other than the owner (i.e. tenant, owner’s children, etc.).
• Adequacy of Additional Living Expense after a severe loss.
• Exclusions poorly understood by policyholders (i.e. Flood, earthquake, and mold).