P&C Specialist reports that Hanover’s 2023 Home Renovation Report shows an increase in homeowners not informing their carrier of home renovations.
“The Hanover’s 2023 Home Renovation Report says that 34% of homeowners planning major renovations in the next year don’t plan to or don’t know they need to tell their insurance company or agent about the changes. That’s an 8% increase from last year.”
Hanover reports that over half of those questioned are planning a home renovation, many of which would be considered a major project. “Sixty-one percent of respondents…are planning home renovations this year, with one in four planning a major renovation. In addition, 41% are planning to spend over $50,000 on their renovation.”
Clearly, homeowners are putting more money in their homes and failing to tell their insurance company. This represents both lost premium dollars and potentially more complexity, conflict and customer dissatisfaction at claim as customers realize that they are underinsured and exposed to more out of pocket costs than they expected.
Too often a claims adjuster is the first person to find out about renovations or changes to the property. The loss of premium to carriers and the ill-fitting coverage for homeowners are clear manifestations of a communication failure between carriers and their customers. The adjuster’s job is made even more difficult as move to remote adjustment and preferred contractor networks that rely on post loss data, totally missing the additional undeclared risk.
Carriers must improve the effectiveness of their risk discovery strategies to identify more significant renovations on covered properties. Education, communication and third-party data and monitoring are strategies for getting the risk right. Maintaining an open, accessible line of communication with policyholders is imperative to increased customer satisfaction. Education works for both avoidance and unfamiliarity. Awareness of the need to report on its own is not compelling. Explaining why the data is needed and how the data is to be applied in both terms of premium adjustment and tailored coverage solutions is required to establish and maintain open and trusted communication.
But how? Agents and brokers can help educate customers and update carriers. But we believe that structured, policy holder self-service risk discovery is the critical component needed to improve both the identification of major change and the policy holder’s ultimate satisfaction. Which is why idMobileTM self-service risk discovery is part of the idFusionTM solution.
VeracityID delivers composable risk-selection solutions to P&C insurers on a native cloud platform called idFusion™. Offered as a subscription service, idFusion integrates with online origination/transaction processing platforms and core systems to deliver user-designed, in-transaction risk detection, intervention, and resolution solutions.
www.veracityid.com
