Reports show that more than 75% of U.S. homeowners did at least one home improvement project since the start of the pandemic and the median spending on home improvements since March of 2020 was $17,140.
Unbeknownst to many homeowners, home renovations often warrant an update to homeowners policies. In the hopes of providing the best risk management advice and remaining competitive, agents need to stay up to date on their clients’ most recent home improvement projects.
Here are five important takeaways for agents:
1 Various home improvement projects can result in the need to update a homeowners policy
Any time an upgrade is made or remodeling is done to a home that changes the value of the home by more than 5-10%, agents need to be made aware of these alterations in order to update the homeowners policy.
This could include upgrading an old kitchen with a granite countertop and adding all stainless-steel appliances. Or it could look like a square footage addition, for example an increase from 2,800 to 3,400 square feet.
Agents need to make sure that homeowners have enough coverage in case there is a loss to these additions, such as damage from a fire or a storm.
2 Not all upgrades lead to added costs on a homeowners policy
Any time clients make improvements that add protection to their home, they could be eligible to receive a discount or credit on their policy. This can include purchasing a generator, adding home security, putting in smart thermostats or setting up water sensors in a basement.
3 Outreach is key to keep informed of your clients’ home improvement projects
At Arbella, we recommend agents routinely send renewal questionnaires to clients that ask questions like, “Have you done any remodeling recently?” This way agents are kept in the loop with client changes that they might otherwise be unaware of.
Furthermore, we recommend whenever agents have their clients on the phone, they make it a priority to ask if there have been any recent changes to their home. By checking in, you’ll be able to get a quick answer and it reminds the clients of the importance of keeping their agent in the loop.
We encourage agents to use their email newsletters and social media to reach out around topics of home remodeling. We find that agents can be extremely helpful in walking clients through the process and can answer questions such as, “How do I pick a contractor? What should I be concerned about with my insurance?” In addition, agents are welcome to repurpose content that Arbella provides on social media to share directly with their clients as resources.
This continually reinforces goodwill with your clients and bolsters relationships.
4 Speak with your clients about changes to their home during renovation season
In New England, most renovations happen in the spring, summer and early fall, so it’s a good idea to check in specifically during those seasons. Clients greatly appreciate a good risk management discussion as that is the value of having an agent.
5 Staying up to date with your clients’ purchases and home renovations is essential
The goal is to prevent your clients from not having enough coverage in the event of an unforeseen loss. In addition, you want to be sure you remain competitive, so if there are discounts you can offer through certain upgrades, you’ll want to stay on top of that.
Clients buy from an agent because they seek risk-management advice, therefore, it’s important to cultivate meaningful relationships with clients and provide the most relevant advice when it comes to home improvements and what they mean for a homeowner’s policy.
Senior Vice President of Personal Lines | Arbella Insurance Group
Jim Hyatt joined Arbella in 2010, and now serves as senior vice president of Personal Lines where his broad leadership experience includes underwriting, product development, operations, and pricing.