Coronavirus has wreaked havoc on everyday life all over the world. The disruption is immense all over the world. But with the current influence of the virus on everyday life, we can neglect the looming economic and financial influence we are jet to experience. With millions of people left jobless with this crisis everyone should wonder if they will be able to maintain and sustain their way of life when this all passes. Homeowners’ insurance is no exception in the time of coronavirus. So how will this pandemic affect your life and influence real estate trends and the insurance market?
Homeowners’ insurance aspects of the corona outbreak
As a global event, the coronavirus outbreak has never been seen or experienced before. Its effects are profound and it is influencing human society globally and in ways that are jet to be studied. From the aspect of the economy and home insurance, it is also having a considerable impact. This impact is both short-term and long-term. Some aspects of this crisis are clear and well-documented.
Other aspects are still unknown and they can not be determined. In the short run the coronavirus is having a profound influence in:
- Home insurance premiums
- Insurance payments
- Home insurance inspections
- Claims processing
Premiums
Homeowners’ insurance premiums are at the moment experiencing a huge decrease caused by the decreased risk. The risk drop is caused by the fact that people are at home due to the safer at home policy. Their presence at home decreases the risk of burglaries, untended incidences, and damages caused by fires and bursting pipes, and other liability claims. The premiums are getting lower at present and in the short run.
On the other side, in the long run, the risk is not decreasing and the long-term effects of the premium decrease are not plausible. In the long run, the risk of civil unrest, insurance fraud, and other factors will cause premium increases. This is because the main expectation is that the economy will experience a downturn that will cause these risks.
Homeowners’ insurance payments
In this time of crisis, there is also a risk of making on-time insurance prepayments. The risk is real since the people are losing jobs, working from home, or with decreased capacity. This is all decreasing their payment capability. However, in the short run, the states have made a decision to tolerate the deferral for insurance premium payments. This means that no one’s insurance can be canceled in a certain period of time. Each insurer and state have different regulation so try to get information about the grace periods they provide during this coronavirus crisis.
Insurance inspections
In the time of corona and with the safer at home policy, the inspectors cant have regular inspections at home. There are the options of sending photos to insurance inspectors as well as allowing exterior-only inspections.
Claim processing
As is the case with the insurance inspection, the claim inspections are suffering the limitations of the safety provisions. Insurance companies are prepared to assess the damage virtually, through pictures and videos to ensure adequate coverage of the claim. Just like home buying and staging is done through virtual tours today.
So, as we don’t know what is in store for us in the future we must know that there are mechanisms of protection in the homeowners’ insurance service. Take care of your health and be secure that your insurance will not let you down in this time of crisis. We will have to wait and see what the future of the insurance market is.