Getting the home insurance required to close is often more complicated than it needs to be. HousingWire recently spoke with Tom Kriby, vice president of client development and partnerships at Westwood Insurance Agency, about the home insurance shopping process and how lenders can help make it simpler for their borrowers.
HousingWire: How are climate-related risks impacting the home insurance shopping process for borrowers?
Tom Kriby: It is tough for buyers to obtain new policies in certain markets, especially in some of the most popular locations, due to increased weather-related risks. Disasters such as wildfires in California and hurricanes along the coasts, to hail in states like Texas have resulted in insurance companies raising rates considerably or withdrawing from states altogether.
Another factor that is also affecting buyers is finding carriers that will accept and insure homes that are older. If a home is older than 10 to 15 years, it is becoming considerably more difficult to find companies that are willing to insure them.
HW: Even in lower-risk markets, home insurance can often be left to the last minute. What problems does this cause for the borrower and lender?
TK: Insurance is an incredibly important piece of the home buying process. It is required. In most cases, you cannot finalize the purchase of your new home until insurance has been secured. Waiting until the last minute can derail all the hard work that came before it.
Obtaining insurance is not often as easy as some might think. Especially in some of the areas we’ve mentioned where carriers are pulling out or raising costs for consumers. Sometimes, insurers need more time to review the application or more information about a new property that the buyer may not have.
At Westwood we emphasize adding the insurance piece early in the home buying process to keep any delays from happening. Our fully digitized process provides quotes within the LOS for a customer to view and accept well before closing. However, we understand that things happen and doing that isn’t always possible. Thanks to some of the technology we use, we can process and expedite policies for customers who need them quickly.
HW: How do lenders and borrowers benefit from a closer relationship between insurance and the home buying process?
TK: The biggest benefit is transparency. Westwood’s goal is to make the purchase of insurance a simple and transparent process. We want our customers to find our tools easy and intuitive to use, to make the process easier for them.
We do that by providing a dedicated portal for customers to purchase their policy. We also do the same for lenders, giving them a portal so that they can track the status of everything that has been submitted throughout the process. It is an efficient way for both parties to stay abreast of what’s needed or where things stand in the process.
This also cuts down on the time needed to relay any changes back and forth, like names or closing date. Basic changes can be requested at any time through the portal, freeing up valuable time that can be used for other aspects of the process. In the end, it allows for an improved process, greater transparency and better understanding for everyone.
HW: What role can technology play in integrating insurance into the home buying process?
TK: While technology continues to evolve, the foundation is the instant and direct flow of information between one or more parties. Reducing the amount of time necessary to get important items from one place to another creates efficiency that drives business goals.
Think about everything that’s required to get a home insurance quote. There is a lot of information that the customer might not have readily available. By working with the lender directly to access the information that we need, our agency is able to remove that step for the customer. That’s what allows us to turn around quotes so quickly, keeping the process moving as it should.
There are so many exciting aspects of the home purchasing process. Tracking down property information should not be one of them. Our use of this technology has shown to be of great value to us, our lenders and our customers.