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Esurance Pioneers Online Homeowners Insurance Purchasing

Esurance is now offering Wisconsin homeowners the option to purchase coverage directly over the internet, a first for the insurance industry.

“Today, only 2 to 3 percent of U.S. homeowners insurance is purchased online,” said Esurance President and CEO Gary Tolman in a press release. “Much like the way Esurance pioneered car insurance online, making it quick and easy to quote and buy, we’ll change how consumers shop for and buy homeowners insurance.”

Esurance’s online tool automatically works with property specialists to estimate reconstruction costs related to an individual home’s characteristics as well as the current cost of labor and materials in the homeowner’s neighborhood.

Coverage includes the standard homeowners policies of structure protection, personal property protection, family liability protection, water backup coverage and additional living expenses, along with customizable options such as “eco” upgrades to Energy Star rated appliances and electronic data loss recovery. The program offers 12 types of premium discounts for those who provide their own appraisal/inspection report, or for customers who bundle their auto and homeowners policies.

According to Steve Lekas, Esurance’s director of Homeowner Product and Actuarial Management, a lack of consistency between carriers catering to a variety of customer needs made it impossible to define homeowners risk efficiently enough without an agent’s help.

However, “Consumers are becoming more and more familiar and comfortable shopping and buying online, and it is becoming something that people expect,” Lekas told PC360. “With these changes, the next step is for an insurance company, who really understands how to best help consumers shop and buy insurance online, to build that capability.”

Esurance underwrites its own homeowners policies, as it does with auto insurance—the insurer chose to debut the program in Wisconsin because the state domiciles one of its underwriting companies, says Lenkas.

Allstate purchased Esurance in late 2011 to revive its limp auto-insurance business that was losing customers’ attention to Progressive and Geico, which were wooing new business with direct-to-consumer online sales.

Esurance has been growing since its acquisition, enjoying a steady incline in new policies and a 27 percent increase in net written premium between the third quarters of 2012 and 2013. However, Allstate’s homeowners policies in place decreased by about 3.2 percent even as its net written premiums increased by 5.5 percent since Q3 2012.

Although only currently available in Wisconsin, online homeowners sales will be expanded within the U.S. In a previous news interview, Esurance president Tolman said the policy will not be offered in Florida and California because of high disaster risks.

 

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