Millions of Americans own their own homes and have insurance to cover many kinds of damage that can happen over the course of a few decades. However, at the same time, a large number of people may let their coverage lapse for one reason or another. As such, it might be wise for them to make sure they’re up to date in this regard, so that they don’t file a claim only to find that it cannot be covered by their insurer. Meanwhile, agents might want to go about the business of actually reminding their clients of this issue as well, to make sure they understand the risks and are able to deal with whatever problems may arise.
The fact of the matter is that the spring is an ideal time for current owners to make sure their home insurance is up to date and dialed in with what they need, according to a report from the Columbus Dispatch. That’s because it will not only serve to ensure that they’re fully covered in the event of a storm or other disaster that may cause significant damage to their homes, but also because it helps them avoid other issues that could arise.
What else could happen?
Consumers who allow coverage to lapse on homes for which they still owe money on might find that the financial institution that controls their loan could take out policies instead, the report said. That, in turn, will often lead to them paying far more for their coverage than they might have expected; this force-placed insurance makes financial sense for the lender or servicer, but not so much for the owners.
What can be done?
Owners who worry about this issue arising for them can take a number of steps to prevent it from happening, the report said. The first of these is to simply monitor their escrow accounts to make sure money isn’t being taken out to cover insurance they don’t necessarily know about. In addition, it’s also wise to keep up with their own home insurance payments for the same reason, so that a lapsed policy doesn’t end up costing them even more than they might have bargained for, whether due to force-placed coverage or a claim that cannot be accepted.
The more agents can do to educate their clients about the insurance process from start to finish – so that they fully understand what’s required of them from both their lenders and insurers – the better off both they and those consumers are likely to be. That’s because if people know what they’re dealing with, they can make more informed decisions about how to proceed. But moreover, studies show that consumers tend to feel better about their coverage when they have open lines of communication with agents or insurers, and therefore, any efforts in this regard could go a long way toward boosting customer satisfaction and client retention rates overall.