NU Online News Service, Oct. 30, 2:20 p.m. EDT
While the economic crisis has created a homeowners' insurance affordability problem for consumers, a residence left vacant could create homeowner policy gaps, according to a report issued by the Independent Insurance Agents & Brokers of America's Virtual University.
"Although most homeowners policies provide coverage for the dwelling on the 'residence premises,' a term typically defined to include the dwelling 'where you reside,' the question is, what happens if you no longer (or never) reside(d) there?" asked Madelyn Flannagan, IIIABA vice president of agent development, education and research.
Addressing the question, the IIABA Virtual University Technical Affairs Committee has published a white paper titled, '"Where You Reside'–The 'Where's Waldo?' Catastrophic Homeowners Policy 'Exclusion' That Could Bankrupt Your Insureds."
The white paper addresses situations that can arise unexpectedly with emergency admissions into long-term care facilities, urgent job relocations, military deployments, illnesses or deaths, and other situations beyond the control or understanding of insureds.
"According to some interpretations and court cases, there are situations that could result in claims for damage to the dwelling to be denied by insurers," said Bill Wilson, IIABA associate vice president of education and research and Virtual University director. "We have reviewed a number of real-life claim denials and court decisions of up to six figures in size because of circumstances not contemplated by consumers. In the case of foreclosures, both the homeowner's and lender's interests may be imperiled."
The IIABA said it has scheduled a one-hour webinar on this subject for Dec. 3.
Copies of the white paper and an executive summary are available online at www.independentagent.com/VU.
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