As with most insurance products, homeowners insurance is tied to an individual and their spouse (if applicable), typically using their legal name and date of birth. This is one of the first pieces of information that is gathered in the process so that the policy is rated accurately, as well as ensuring that prior insurance claims checks can be accurately completed in order to rate the policy. Other information such as their prior address and prior insurance history may be gathered as well.
Replacement cost Estimator
The next, and probably most important step in the process is completing the replacement cost estimator. An experienced agent will take this time to assess the construction of the home, including its exterior and interior features. Foundation type, square footage, home style, roof shape, floorcoverings, and many other home specific items are accounted for in this process with the aim to accurately estimate the cost of rebuilding the home with today's cost of labor and materials. We do this to make sure your client has an adequate amount of coverage on their policy in order to protect them from the worst case scenario, a total loss to their home.
Next, we find the best policy available
Once we know the specifics of your client's new home, we submit that information to our insurance carriers. In this step, 20+ carriers are quoted. Based on the specifics of the home and the type of coverage available, we find the carrier that is the best fit for your client and the home. The way we determine this is by finding a combination of the best available rate, as well as making sure the carrier is fit to provide the coverages needed. For example, Carrier "A" may provide the best rate, but the home might have an older roof and the carrier won't provide full replacement cost coverage on older roofs. In this case, we might propose Carrier "B", who has a slightly higher rate, but will provide the coverages the client needs because their appetite for older roofs is better than Carrier "A". Price is a big factor in helping you find the best carrier, but not the only factor.
lender is provided policy details
Once the client chooses a policy and the specific coverage endorsements they may want, the policy is written and submitted to underwriting. At this point, we are able to produce evidence of insurance and a premium invoice for the client's new policy, which we send to them and their lender. In most cases, clients are using ESCROW accounts in their loan to pay for taxes and insurance, which is where the homeowners insurance will be tracked and paid on the client's behalf. Often times, the premium for the first year of the policy is sent to the insurance carrier from the closing attorney's office at closing.
Insurance company inspects the property
Typically after closing has finished, the insurance company (if required) will conduct an exterior inspection of the home. This is different from the inspection completed during the home buying process, as the client is not charged for it. In the inspection, the carrier is checking to make sure the home is in great shape and not currently damaged, or that there are no current threats of potential losses at the home such as missing railings, unstable foundations, overhanging trees, etc. Also, the inspection is to ensure that no detail has been missed in the process so that your client has the best experience possible. In most cases, inspections check out just fine as long as properties are maintained and in good condition.
