Stand-alone homeowners insurance policies (also called mono-line home policies) are becoming a thing of the past. If you want to purchase homeowners insurance, there is a strong possibility that you will have to bundle your auto insurance policy with it in order to obtain coverage—the main reason for this profitability!
Historically speaking, mono-line home accounts are not profitable. Specifically in the Midwest, we experience wind and hail claims on a somewhat large scale. Looking back at the last couple of years, these claims have been astronomical! Wind and hail claims make up roughly 50% of all homeowners claims, averaging about $8,000 per claim. The annual premium from a homeowners policy is quickly used up on one wind or hail claim to a home. Without the auto and other lines of support, your profitability is blown away faster than a roof in a windstorm!
The industry recognizes the need to occasionally write a monoline home account. For example, a senior that no longer owns a vehicle or a good quality risk, may have a few dings on their driving record. If you have a circumstance that you feel deserves to be the exception to the rule, contact your carrier and explain. A lot of carriers will allow mono-line homes, as long as they make up 10% or less of your book.
What do we foresee in the future? We have seen the market slowly open up to monoline homeowners policies again. We’ve also noticed carriers that would not write them the last couple of years, taking a look at them again.
Another trend you will see is an increase in a wind/hail minimum. As history will show, the standard used to be $500, then it was $1,000, and now we are looking at $1,500 and up for a standard minimum. This change is inevitable and denying it will only wreak havoc on your sales and retention!