How to Speed Up Your Remodeling Insurance Quote: 6 Key Tips

Each month, US Assure Director of Product Underwriting Gina Newmans joins us in the studio to address why certain underwriting questions are asked, where common mistakes occur in the policy issuance platform, and offer guidance to help agents submit applications correctly.

Read the Video Transcript:

Why do some remodeling builders risk applications move through underwriting quickly while others trigger a lengthy back-and-forth? The difference often comes down to six critical details that need to be properly documented and underwritten upfront.

In this video, we’ll reveal these bottlenecks and share tips to help ensure your next submission is a breeze. 

First, let’s level set on what a remodeling builders risk policy is and isn’t.

This is not a homeowner or vacant building policy. Our remodeling builders risk policy is designed for existing structures actively undergoing renovation.

And, if there are multiple buildings on site, only the one being renovated is eligible for coverage.

Now, let’s walk through those six application details that, when incorrect, can either delay the underwriting process, create challenges for claim payments or even lead to a policy recission. We’re going to focus on the online application process for all residential remodeling projects, and commercial remodels valued up to 10 million dollars.

Number one, the year the existing structure was built.

Eligibility and supplemental documentation will vary based on the property being remodeled. 

If coverage for the existing structure is needed, agents should consider providing current photos of all sides of the structure upfront to help speed up the underwriting process. Keep in mind, these photos will be required for buildings over a hundred years old and those in poor condition. 

Age is a key rating factor. If found to be incorrect, it could affect our decision to offer a policy extension, if needed.

Age of the structure is one way we can begin to envision the structure that needs coverage, but the next detail really helps paint the picture.

Number two, condition of the existing structure.

This state of the structure matters whether you want remodeling coverage to include or exclude the existing structure because it can increase the overall risk exposure. 

As part of the application, you’ll be required to rate the structure’s condition as Good, Fair or Poor. If you can’t visit the job site, a quick online search or street-view image can give you a lot of information about the property along with the city’s records. 

If the structure has existing damage or deferred maintenance, our underwriting team will need to conduct an additional review. But this does not automatically disqualify the risk. And remember: we are not a market for buildings that are slated for or undergoing demolition.

No matter what, underwriting needs an accurate depiction of the structure and improvement plans to make a well-informed decision.

And when it comes to those improvement plans, the next detail we need is critical to our understanding of what your client wants to cover.

Number three, percentage complete.

Risk eligibility is also based on the amount of renovation that has already been completed at the time of submission. 

To calculate percentage complete, divide the value of completed work to-date by the total  renovation value. 

But, why is the percentage complete important? 

Projects that are more than 30 percent complete before the policy effective date are considered existing inventory per our coverage form. That means it may only be eligible with underwriter approval. 

Be sure to double-check your math when entering this on an application. In the event of a claim, an incorrect percentage complete can lead to underpaid or even unpaid losses.

And while we’re talking numbers, this next application detail can have a sizable impact on your client’s coverage.

Number four: let’s talk about start date.

When securing remodeling coverage including the existing structure, renovations must begin within sixty days of the policy effective date. Otherwise, certain causes of loss — such as theft, vandalism, water damage and more — may not be covered under our HBIS-37 Ongoing Activity clause. 

Delayed construction means your client would be paying for coverage that isn’t being used, watching their policy term tick away and increasing the odds that they’ll need an extension.

If construction won’t begin right away, a vacant building policy might be the right short-term solution until your client is ready to start remodeling. 

So, we know when they are planning to begin construction … but now we need to know: what are they planning to do?

That brings us to number five, scope of work. 

A vague or incomplete scope of work is a common cause for underwriting delays. Without enough detail, underwriting can’t properly assess the risk, which slows their decision making.

The more detail you can provide upfront the better. 

For example, instead of describing the project as “kitchen remodel,” specify details such as “replacing floor and wall cabinets, installing granite countertops, replacing light fixtures, replacing old plumbing, replacing carpet floor with tile.” This level of information gives underwriting a better picture of what’s at risk.

The safest advice I can give you for this topic is to attach the contractor’s scope of work to your application. While helpful for remodels of any value, it’s required for all risks valued at five million dollars or more. It also comes in handy in the event of a claim so the adjuster doesn’t have to wait for the insured to provide it at that time.

Now that we have the major points of the project and structure all laid out neatly, this last application detail comes down to basic eligibility.

Number six, historic registry or regulation.

Risks that involve historic societies or a registry often come with a lot of complications, and age isn’t the only factor. It can be difficult to determine the actual cash valuation for materials, it requires specialized trade contractors and so on. 

We’re interested to know current or future arrangements with historic societies or registries, meaning:

• Is it actively registered?
• Does your client have plans to apply for the historic registry?
• Is a historical society involved at any point in the policy term?

If the answer to any of these questions is yes, the risk is not eligible for our admitted program but may qualify for our E&S market. 

Let’s wrap up.

What this really comes down to is working in partnership with your clients, and with US Assure, to ensure the risk is represented and underwritten accurately so that coverage responds the way you and your client expect.

And if you’re ever unsure, just ask. We’re always here to help.

This is intended as a general description of certain types of insurance and services available to qualified customers. Any description of policy provisions is meant to give a broad overview of coverages and does not revise or amend a policy. Refer to the policy coverage form for a complete representation of the scope of coverage, terms, conditions, exclusions and more. The policy is the contract that specifically and fully describes your coverage. Some products may not be available in all states and may only be offered on a non-admitted basis. Product availability is subject to change.