<   Back to Blog

How COVID-19 Might Affect Homeowners Insurance

Home insurance protects your home and personal belongings in case they get damaged or lost during specific natural disasters or burglary. It also covers the policy holder’s additional living expenses, as well as medical payments in case you are found liable for an accident.

Indeed, this type of insurance policy can give homeowners peace of mind. However, the advent of the global COVID-19 pandemic is making policyholders uneasy. COVID-19 has impacted just about every sector of society, and financial protections like insurance are no exception.

Should you be worried about the COVID-19 pandemic affecting your homeowners insurance coverage?

The Impact of COVID-19 On Home Insurance

The good news is, COVID-19 won’t impact your homeowners insurance that much. Your policy’s property coverage will remain the same, especially if you’ve been paying your premiums without fail.

Even when you’re unable to pay your premiums because of financial hardship after losing your job due to the health crisis, you can get some much-needed breathing room through the temporary payment suspensions many insurance providers are offering their clients in the time of coronavirus.

Still, the COVID-19 pandemic could compel you to get more liability coverage due to the unique reality the world is in right now.

Why You Might Need Higher Personal Liability Coverage

With states suspending school and issuing stay-at-home orders, young children presumably full of energy are cooped up inside their homes. The likelihood that boredom will get the better of them is high, and they just might sneak out of their homes, find their way into your property, and hurt themselves. The possibilities are endless: They could fall into your swimming pool, get bitten by your dog, or slip on the driveway and injure themselves.

Staying at home also means relying more on delivery people for groceries and other essentials. The more people delivering stuff to your house, the more people are at risk of slipping on your porch and breaking something in the process.

If you have homeowners insurance, then any liability you might have for any such accident is covered. The question is, is your coverage enough to pay for claimants’ medical expenses? Keep in mind that your personal liability is covered only up to the limit of your policy.

The lower your personal liability coverage, the higher the possibility that you’ll be paying a portion of claims made against you out of pocket.

More Time At Home Could Lead To More Claims

As mentioned above, people are housebound because of the COVID-19 pandemic. Because more warm bodies are spending more time in their homes than they usually did pre-COVID-19, the house itself is bound to sustain a higher amount of wear and tear, and at an accelerated rate at that. When something finally gives out, it would lead to you filing a property damage claim, which could make your future premiums go up.

Processing Claims

The COVID-19 pandemic will also affect the way insurance companies process claims.

Normally, insurers dispatch assessors to settle claims. However, with all the quarantine-related regulations in place, insurance companies won’t likely do so. Although some providers continue to perform exterior inspections despite social distancing measures, others are liberal enough to ask clients to send photo or video evidence instead.

These are just some of the ways that the COVID-19 pandemic might affect homeowners insurance. For now, things don’t look that bad on the homeowners insurance—and insurance in general—front. Nevertheless, we need to keep up to date with any policy changes that our insurance providers might impose in the coming weeks. After all, the COVID-19 problem isn’t over yet, and the whole world is still pretty much in uncharted territory.

About the Author

Rachael Harper is the Content Marketing Strategist of Bennett & Porter, a wealth management and insurance firm based in Scottsdale, Arizona. When not writing, she makes use of her time reading books and playing bowling with her family and friends.

Categories: helpful tips