Venturing Into The High-Risk Property Market, Is It Worth It?

Carriers within the property and casualty industry have multiple tools to aid them in their never ending quest to mitigate risk. From utilizing ai and big data to taking advantage of commercial and residential inspection technology at the ground level, all efforts pursue this ultimate goal.

One often-overlooked piece of the puzzle are the customers themselves and their ability to work with carriers to reduce risk. As it stands, homeowners typically are subject to a strict pass/fail measurement where coverage is concerned. Either the risk is too great to insure the property or the level of risk is acceptable enough to enter into a contract. While this is simply profitable insuring 101, this leaves many potential customers both without insurance and without reason to take steps to mitigate the offending risks. In this fiercely competitive industry, working with higher risk homeowners stuck in a, for lack of a better term, insurance desert may become the next strategy to stay ahead of the competition.

Incentivizing Coverage
Removing the pass/fail element to coverage means replacing it with a system where the insured helps you to mitigate the risk. This can be accomplished by incentivizing coverage with varying levels of protection according to confirmed homeowner actions. For example, homeowners in a high crime area have access to a higher level of claim payout if an advanced security system is utilized and active at all times. Homeowners with older houses gain protection amount increases in an ascending step format for every needed replacement and upgrade made. Necessary information and achievement confirmations can easily be obtained via residential inspection. Naturally, these cases will require more work due to the individual attention needed for the targeted properties, but the result is complete control over an ignored and desperate market.

Advantages Of An Ignored Market
High-risk regions, neighborhoods, and individual properties are avoided for a reason. While a homeowner is genuinely powerless against how often or how roughly mother nature will strike, not all risk types are worth ignoring completely. Your advantage here is the same as being the only grocery store within 50 miles of a rural town. You set the prices as desired for profitability and, as the only option between hope of recoupment and permanent disaster, you have high-paying customers in exchange for a degree of risk. Another advantage is customer loyalty with the help of an incentivization system. In an untapped market, homeowners will be loyal to the brand that gave them a chance. Additionally the act of incentivizing coverage means insureds will be far less likely to jump ship after investing time and money to gradually increase their overall coverage.

Checks And Balances
A residential inspection will be your greatest tool in ensuring compliance and protecting yourself against higher than necessary risk. Accurately documenting and reporting the deficiences and potential risks of any home will enable you to design and incentivize the risk reduction process. Selecting an experienced company to perform thorough and detailed residential inspections is more important than ever when courting the high-risk market. Customers will appreciate having the ability to work toward a standard level of protection that previously was impossible to obtain. Even if they must work to upgrade to the level of coverage desired, they will personally reap the benefits in having a safer, and higher valued home. With a focus on confirmable and actionable goals, you can combine a grateful consumer base with higher profit margin.

Technological advances and working within our digital society is the current craze within the insurance and inspection industry. Thinking ahead to the future beyond the current hype is often what separates the winners from the losers in any competitive industry. In this case, staying a step ahead may mean welcoming homeowners who value and desire home insurance more than any other group. Intelligent and informed selectivity will still play a part in keeping your risk level as low as possible, which is why the inspection process will continue to play a critical role in the success of any property insurance venture.

Please contact us to learn more about how Insurance Risk Services can help push your brand to new heights with our residential inspection services and field underwriting support.