The tip of this week is a simple one.
Do not complete an insured’s Homeowners application without discussing it in detail with them and having them sign the application. I know that most often these applications are completed in our agency management systems based on a phone conversation we have with an insured or their representative and then uploaded to the company. Some carriers do not even require that they be signed, so then it is “your word against mine” when a claim is denied and the insured said they never saw or signed the application.
The application is where all the trouble starts. We are applying for coverage based on what the application includes. And questions that are posed are if the home is occupied, vacant and when the insured intends to occupy. The insured has no idea, unless we tell them, that they have to occupy the home in thirty days or sixty days depending on the company requirements. And if they don’t…..then there is NO coverage with some carriers and others will penalize the insured. Did we tell them that? Or, did we just complete the application, not have them review it and rush it off to the escrow company. And then we just renewed and renewed and renewed.
This has become more and more of a reality with homeowners buying homes on spec; buying a home that was a short sale or foreclosed and having to put in time and money in renovating them, and in both cases, not occupying in the required time. So, the tip of the week is to make sure you communicate with the insured what the requirement are in terms of occupancy and having them read and sign the application. When the claim comes through, there’s no coverage, and the finger points in your direction, you’ll be happy you followed this simple tip.