Digital tools, education may help homeowners find the best coverage

According to Hippo’s 2022 Housepower Report, a majority of homeowners – 78% of respondents – reveal that they have experienced regrets about purchasing their homes within the last 12 months. 

The report, which surveyed over 1,000 homeowners in the U.S., highlights the difficulties of homeownership as inflationary costs continue to rise. Nearly half of participants, 49%, respond that homeownership was more expensive than they expected. Of those who purchased a home during the pandemic, 87% say they regret their purchases, compared to the 73% of respondents non-pandemic buyers who agree.

There is also a large coverage gap in the U.S. in homeowners insurance that protects against risks like wildfire – according to the Insurance Information Institute, an estimated two-thirds of homeowners are underinsured for wildfire loss as most homeowners policies are unable to rebuild a home after a total loss. 

Travis Hodges, managing director of Omni-Channel Sales and Services for VIU by HUB, adds that flood insurance is another important area to concentrate on. 

“Wildfire [loss] is well documented and clearly a risk and a challenge, but let’s look at those wildfire communities. What are they dealing with today? Flood,” Hodges says. “…I think the flooding risk is the one part that people don’t talk enough about. And when we talk about an insurance gap, I would say part of the gap, too, is just exposure to a risk that average homeowners have, in regards to propensity for flooding, that they’re not aware of and they’re not protected.”

Informing homeowners of the potential risks and educating them on the recommended coverage is one part of the solution, Hodges says, but tools and technology can be a help as well. 

“Something that we’re very intentional about is that, at HUB, we want to provide both. We want to provide speed and access that’s complemented by knowledge and education. I think adding one without the other is going to create a shortcut that somebody is going to be disappointed with,” Hodges states. 

A frequent, ongoing discussion between a homeowner and their agent or broker can be crucial to keeping customers informed and adequately covered. And digital tools that create better access to that conversation could help to address issues with lack of education or understanding of one’s policy. Hodges explains that HUB uses an omnichannel approach that combines both digital and human engagement. 

“We have trained licensed professionals that know how to assess a risk, listen to the needs of a consumer and make sure they’re adequately protected…” Hodges says. “You can find online tools, but [homeowners insurance] is a technical industry that requires extensive knowledge… You probably want to lean on a professional that’s licensed and trained in that field. And so that the human component cannot be understated.”

The Hippo Housepower Report notes that overall rising rates have led 64% homeowners to delay home maintenance or repairs, and 64% respond that high gas prices have affected home repair finances.

“The effects of inflation and price increases across the board have probably played a significant contribution in that for most homeowners, like the cost of materials,” explains Courtney Klosterman, Hippo’s director of communications. “Home upgrades or things that we all have on our wishlist are oftentimes getting delayed, because we’re having to reprioritize where our financial spend is going.”

One issue that may contribute to this home buyer’s remorse is the lack of awareness or education on the maintenance of one’s home, according to Klosterman. 

“It’s oftentimes because there has been a lack of innovation within home insurance, more broadly, to create more services that allow insurers to really keep up with the changes that homeowners are making. And homeowners may also not be as informed that if you’re renovating your kitchen, it might be a good idea to update your home insurance policy to ensure that your coverage limit and everything associated with the policy lines up with any changes in value of your home,” explains Klosterman. “I do think that there’s a lot more education that can be done to help homeowners understand the cost of being underinsured, and that an important part of that is maintaining the home on a consistent basis.”

Hippo also offers services like Hippo Home Care, where customers can speak directly to a homecare expert and perform seasonal home checkups on certain systems.

“One of the things that we offer is complimentary smart home devices with every policy that’s eligible. And setting up that water detector device underneath your sink can be a make-or-break for whether you have to file an insurance claim…” says Klosterman. “It’s the small things that can really have a huge impact over time for customers to be better protected.”