Have 2 Small Homeowner Insurance Instead of 1 Big One?

[zippy]

Is it advantageous to have two smaller homeowner insurance policies than 1 big one? For example, if someone had to put in a small claim, can he do it submit in one so the other will not know and raise the rates?
If there is a big disaster, how does it affect the claim? Can a claim be put into both?

 

[fed up]

That's a great idea. So when there is a loss and something goes wrong the customer can sue your E&O because the policy does have enough coverage, plus how would you explain to your inspection and underwriting that you have purposely underinsured the home on the policy? Customers will ALWAYS remember the conversation you had with them regarding the 2 policies.

 

[adjusterjack]

Zippy, are you really an insurance agent? I have my doubts.

I also doubt that you have ever read a homeowners policy, not even your own, or you would already know why having two small policies won't work.

 

[zippy]

My question was not whether it was good for the agent, I am asking if it is good for the consumer. This is the "Consumer" sub-forum. One of the problems with having HOI with only one company is that one company will not cover something, and the another company will, and vice-versa.
Also, can an agent find out if the consumer has another policy and the consumer does not tell him?
What if the consumer wants to start a new policy right away and there is a few months left on the old one?

 

[fed up]

What if the consumer wants to start a new policy right away and there is a few months left on the old one?
He gets a refund of the unused portion of the premium.

Find something specific that one policy will not pay and another will. Then place the entire house on that policy. Your concept makes no sense since most omissions can be covered with an endorsement or two. If one policy includes sewer back-up and the other doesn't, write an endorsement to the policy. You should be writing endorsements anyhow. These include things like roof and siding replacement, basic jewelry coverage, childcare coverage, business exposure, etc. You also should be looking for Scheduled Personal Property and writing coverage for that. But no lender is going to allow you to write a 200K home with (2) 100K policies

 

[adjusterjack]

I am asking if it is good for the consumer.

It isn't.

One of the problems with having HOI with only one company is that one company will not cover something, and the another company will, and vice-versa.

Again, I question whether you really are an insurance agent.

The mainstay of homeowners insurance is the HO-3 which is widely used in one form or another by the entire industry. On top of that, insurance companies add options that an agent can offer to his customers to fill in those blanks.

Also, can an agent find out if the consumer has another policy and the consumer does not tell him?

Insurance companies share claims information through CLUE reports but I don't think they share policy information. Yes, it's possible for a policyholder to scam an agent but that is rare because most people don't want to pay for two policies, especially if they have to deal with mortgages companies that pay the premium out of an escrow account. Your scenario is rather far fetched.

What if the consumer wants to start a new policy right away and there is a few months left on the old one?

Also doesn't happen very often unless there is a substantial reduction in premium. If it does happen you send the old one in for cancellation and partial refund.

 

[Markthebroker]

Writing two inferior homeowners policies on one home reminds me of the idea of tying two drunks together in the hopes that they walk straight.