 |
October 2006 |  |
 |
||
 |
 |
 |
 |
 |
 | ||||
Big Homes, Big Risks - Houses are Getting Larger, with More Equipment that Needs New Coverage
HSB's Equipment Breakdown Program for Homeowners Offers Broad Protection for Your Clients
American homes keep getting bigger. They're also more expensive and better equipped. As the size of the typical house has increased over the years, so has the amount of equipment it takes to keep them comfortable.
CHALLENGE AND OPPORTUNITY
This presents an opportunity for insurers, which are expanding homeowners coverage to include protection against equipment breakdowns, and agents who want to broaden coverage for today's exposures. It's also a challenge to add a specialty coverage that for decades has only been available to commercial clients.
A GROWING COVERAGE GAP
Homeowners have a lot invested in equipment for air conditioning, heating, hot water, security and other basic services. Homeowners policies provide a range of insurance, but are not designed to cover most mechanical, electrical, or heating equipment breakdowns. The trend toward larger and more costly homes with many types of equipment can create a coverage gap for policyholders.
SOMETIMES A HOME REALLY IS A CASTLE
The average size of a new one-family house increased to 2,434 square feet in 2005, according to the U.S. Census Bureau, up from 2,266 square feet in 2000 and just 1,785 square feet in 1985. Many homes are even larger, dubbed McMansions or "Garage Mahals" because of their outsize construction. Equipment also has changed as 89 percent of homes were built last year with central air conditioning, virtually 100 percent in the South.
BREAKDOWNS REQUIRE SPECIAL COVERAGE
Personal lines insurers are responding by adding equipment breakdown to their homeowners policies. But equipment claims are not like other property claims. It takes experience and specialized knowledge of equipment to underwrite the business and adjust the claims.
HSB MAKES IT EASY
A simple and effective way for insurance companies to add equipment breakdown is through a specialty reinsurer. HSB's Equipment Breakdown Coverage for Homeowners provides everything from underwriting to claim service for companies that partner with HSB, making it easy to broaden coverage without adding staff and resources, or increasing handling costs for insurers or their agents.
WE KNOW EQUIPMENT
HSB has the experience and resources to handle the coverage for personal lines carriers that offer equipment breakdown for homeowners. After all, we've been insuring commercial clients for years. Ask your carrier if they participate, or for more information about the program contact HSB toll-free at 1-888-665-3688.
