A simple, two-story home with a small yard and a white picket fence used to be the quintessential American home. But today, homeowners customize their property with everything from online security devices to pools, trampolines, elaborate backyard designs and even personal drones.
These trends have led insurers to continuously reshape and refine their coverage offerings to reflect emerging needs. If you’ve made any significant purchases or home improvements recently, you may want to explore add-on insurance options to make sure all of your assets are fully covered. You may also be eligible for discounts, if your improvements increased your home’s security.
What’s Your Home’s Risk?
Carriers use predictive analytics to continuously assess the risks of homeowners and adjust rates or coverage options accordingly. For instance, after analyzing data on the large number of dog bite claims, insurers now ask if you own a dog and, if so, which breed. If you have an aggressive breed, don’t be surprised if your insurance policy features an exclusion for dog bite claims. Similarly, trampolines, unfenced swimming pools, all-terrain vehicles and diving boards also add to a homeowner’s risk – and many times insurers will not underwrite them in a standard policy.
Still, as technologies and gadgets continue to change, insurers are trying to fill coverage gaps by adding endorsements, integrating new lines of coverage, expanding discount packages and customizing policies to meet consumers’ interests. Soon, homeowners will be able to buy policies with options to add cyber liability, identity theft protection, flood coverage, mortgage life, special limits for toys and equipment breakdown.
A few examples of add-on insurance that have gained traction recently include water and surge back-up, which minimize damage due to a water line malfunction, as well as mechanical breakdowns. Many homeowners are particularly drawn to mechanical breakdown coverage, which is also known as a home warranty policy, and covers repair costs and partial replacement costs for appliances such as HVAC systems, refrigerators, washers and dryers.
Look for Discounts Related to Smart Home Technologies
As more people start to employ smart home technologies to keep their homes safer, such as connected water sensors, smoke detectors and door bells, insurers will be measuring the impact these items will have on your homeowner’s policies. Some items, including water shut off systems, have the potential to reduce water loss claims, and may even earn you a premium discount. Others, such as sensors which indicate alarm system activation, may result in removal of your home security system discount if you regularly forget to arm the system.
Personal drones have also recently come to the attention of insurers. The question over these gadgets centers on whether any bodily injury or property damage caused by these toys is covered under a normal homeowner’s policy. The current answer seems to be “yes,” but that may change if there’s a rise in use and accidents.
Renting Your Home Out May Pose an Additional Risk
Vacation rental by owner (VRBO) properties add another layer of complexity to homeowner’s insurance. Considered a commercial enterprise, any damage caused by a renter would fall under VRBO coverage and not traditional homeowner’s insurance. But home-sharing services such as Airbnb, where you may rent out a room in your home for a few days, do not pose quite the same risk as a VRBO, and insurers are currently determining the best way to underwrite this activity.
Contact your HUB Personal Lines specialist to review your policy and make sure you have all the coverage you need – and the discounts you’re eligible for.