Alongside attorneys and other professionals, public insurance adjusters in Texas play a crucial role in advocating for policyholders to ensure fair and accurate property claim settlements. Green, Klein, Wood & Jones offers this article to explain some of the critical, basic differences between Homeowners and Commercial insurance policies and claims, offering insights that Texas public insurance adjusters need to arm themselves with for effective advocacy.
While there are many variables involved within Homeowners and Commercial policies, and the structures and coverages they can offer, we’ll break down the most common, general concepts.
Need more education after reading this article? Be sure to follow us on Facebook or LinkedIn to stay updated. Our experienced attorneys give back to the property insurance claims professional community at large, by providing educational presentations and keynote speaking throughout the year, nationwide.
Now, let’s get started on covering some basic definitions and differences between Homeowners and Commercial Insurance policies.
A Foundation in Understanding Homeowners and Commercial Insurance Policies
Homeowners Insurance Policies
Homeowners insurance is designed to protect individuals and families from financial losses caused by events such as fires, theft, and other covered losses affecting their primary residence.
While there are different types of homeowners policies that offer different coverage structures, the most common base coverage form typically includes the dwelling, personal property, liability protection, and additional living expenses coverages if the home is uninhabitable due to a covered peril.
Commercial Insurance Policies
Commercial insurance, on the other hand, caters to the needs of businesses and organizations. It encompasses a broader spectrum of coverage to protect against property damage, liability issues, business interruption, and more.
These policies are tailored to address the complex risks that businesses face, considering their industry, size, and operational scope. These type of policies can be sold to businesses, nonprofit and educational institutions, and more.
Some organizations like government or others may be self-insured, which comes with its own challenges and intricacies. For this article, we’ll focus on the most common commercial insurance you’ll see in the field.
3 Key Differences Between Homeowners and Commercial Claims
1. Complexity and Scope
Commercial claims are inherently more complex due to the nature of business operations and the various stakeholders and coordination involved.
The valuation of losses can be more complicated, incorporating not just physical damages but also loss of income, extra expenses incurred during restoration, and liability claims from third parties.
While not always the case, homeowners claims can often have a more straightforward assessment process focused on what is necessary to repair the property damage and in some cases, additional living expenses (ALE).
While there may be less variables involved, large loss homeowners claims can still be complex at times, especially when it comes to assessing repair methods, scope, amount, workmanlike repair requirements, and determining what the policy does, and does not cover.
2. Policy Terms and Conditions
Commercial policies are highly customizable, reflecting the unique risks of each business. This customization means that public insurance adjusters must thoroughly understand the specific terms and conditions of each commercial policy they work with.
Homeowners policies are more standardized, though significant variations can exist depending on the insurer, locale, and any endorsements or riders added to an individual policy, just to name a few.
3. Claim Settlement Process
The claim settlement process for commercial policies often involves more negotiation and documentation, given the higher stakes and more significant financial implications. With more customized coverages, comes more individual focuses to reconcile during a claim. Businesses may also need to prove the impact of the loss on their operations, requiring detailed financial records not only from the past, but also in the present.
Homeowners claims usually proceed with a more linear path in mind, with a focus on promptly restoring and indemnifying the policyholder’s home and personal property. Even if there is a dispute as to additional living expenses, there are typically less individual expenses to track, than what a commercial claim may entail.
Practical Tips for Texas Public Insurance Adjusters
- Deep Dive into Policy Details. Familiarize yourself with the nuances of each policy type. For commercial policies, pay close attention to coverage exclusions and limits, especially regarding business interruption and extra expense coverages.
- Documentation is Key. Encourage policyholders to maintain comprehensive records of property, inventory, and financial operations. This documentation is crucial for substantiating claims, especially in the commercial realm.
- Understand the Local Regulations. Each state’s insurance laws, caselaw, and regulations can impact claim processing and settlement. Get informed before you adjust, and stay updated on any changes that could affect your clients.
- Build a Network of Experts. Especially for complex commercial claims, having access to a network of professionals, such as forensic accountants and insurance-focused attorneys like the attorneys at Green, Klein, Wood & Jones, can be invaluable in accurately assessing and advocating for your client’s loss.
- Inform Your Clients. Whether homeowners or businesses, policyholders benefit from being updated within the claims process, and given an overview of the current state of their claim, action steps, challenges, and claim goals. As their adjuster, your insight can help them set realistic expectations, and have the information they need to stay engaged within their claim.
Conclusion
For Texas public insurance adjusters, distinguishing between homeowners and commercial insurance claims is vital for effective policyholder representation.
By understanding the nuances of each policy type and the intricacies of their respective claims processes, adjusters can better advocate for fair settlements. Staying informed and adaptable will be key to success in this challenging, yet rewarding field.
Want to learn more? Follow Green, Klein, Wood & Jones on Facebook or LinkedIn to stay updated and informed.
