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Ask the Expert Q&A: Residential Property Insurance

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Featured Solutions: Residential Property

As today’s homeowners face the mounting pressures of inflation, worsening weather events and more, it is increasingly important for them to protect their assets with Residential Property Insurance policies such as Homeowners Insurance, Flood Insurance and Personal Articles Floaters. To learn more, Crain’s Content Studio spoke with Brandon​​​​ McCarty, Regional Practice Group Leader, Burns & Wilcox, Philadelphia, Pennsylvania.

What are some of the greatest risks in residential property today?

B.M.: The top three are going to be inflation, natural disasters, and insurance carriers exiting the market. A claim that might have cost $15,000 to $20,000 five years ago could be $40,000 today, and you may have never adjusted your Homeowners Insurance correctly to have adequate coverage after inflation. We are getting natural disasters in places we have never gotten them before, which ties into insurance carriers exiting the market, and we are getting larger, more inland storms than we ever have. Carriers are preparing for that with large yearly increases in premiums, or they are just leaving the market. A lot of these carriers are having a hard time keeping their head above water.

What should homeowners be aware of relative to these risks?

B.M.: They should stay informed. Pay attention to the news and what is happening with the insurance industry. Regular maintenance and review of insurance policies is very important. Homeowners do not review their insurance policies as much as they should, but when it comes up for renewal, they should sit down and figure out if they are covered adequately with their broker.

Which insurance policies can help them respond to these threats?

B.M.: A lot of homeowner’s policies are similar. You want to be covered for fire, theft, vandalism, and wind and hail. Flood Insurance is also important; homeowners may think they have it on their Homeowners Insurance but they do not. Personal Articles Floaters, which can cover jewelry and other high-value items, are also becoming more and more popular.

What should homeowners know about deductibles?

B.M.: It is becoming popular now to have two different deductibles: all other perils, which is for instances such as fire, theft, and vandalism; and wind and hail coverage. Wind/hail deductible used to be a dollar amount, but we are now seeing it as 1%, 2% or 5% of your Coverage A. A homeowner could be going from a $1,000 wind and hail deductible to 2%, which could be $10,000 or $15,000. I do not think as many homeowners are as aware of this as they should be.

What steps should homeowners take to complement insurance coverage from a prevention standpoint?

B.M.: Water shutoff devices and home security systems with monitoring stations are getting more popular and more affordable. Homeowners should also be aware of their surroundings and avoid posting on social media about being away on vacation, for example.

Can you offer an example of a scenario you have dealt with that would be illustrative of the types of risks we have been discussing?

B.M.: If there is a clogged sewer line or a backed-up drain, if you do not have the proper water shutoff equipment, that water will just run. If you are asleep for seven hours, that is a lot of water. It can put your life through a mess. Those claims are becoming extremely pricey. Homeowners will also want to take care of yearly maintenance, clean their pipes, and look into tools like water backup systems.

Is there anything else that you think is important to know about mitigating residential property exposures?

B.M.: I think everyday homeowners need to be aware of frivolous claims, which are hurting the industry. For example, a roofer could target a development that got hit with a hail storm, encouraging homeowners to put in a claim when it may not be necessary. Homeowners may not realize they could get surcharged and possibly even nonrenewed.

What are the greatest opportunities for brokers to get into Residential Property Insurance and how can they increase their success rates?

B.M.: The housing market is continuing to grow, so there is definitely opportunity there. The insurance industry as a whole is also continuing to grow; it is not slowing down. With Homeowners Insurance specifically, a lot of homeowners would benefit from a Personal Articles Floater and Flood Insurance, which gives them a well-rounded portfolio of insurance and helps you sleep better at night because you know you did what is best for the client.

What advice would you give brokers on targeting individuals to sell this coverage to?

B.M.: The idea of informing homeowners and giving them the knowledge and power to make sure they are making the right insurance decision with you will help you grow your relationship with the purchaser. Having those conversations and selling it not on price but on your knowledge and the proper coverages is the trend we should be making as an industry.

What services or features of Residential Property Insurance are specific to Burns & Wilcox?

Due to our growth and great loss ratio, our relationships continue to grow with our carriers. On top of that, we are also seeing opportunities for new partnerships.


Residential Property Insurance

Why your clients might need it: Residential Property Insurance can protect homeowners from severe weather events, inflation, and insurance carriers exiting the market.

Protects against: Inflation, natural disasters, theft, and vandalism, along with insurance carriers exiting the market.

Expert opinion: “It is becoming popular now to have two different deductibles: all other perils, which is for instances such as fire, theft, and vandalism; and wind and hail coverage.”

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