Two-thirds of insureds don’t know what their homeowners’ policy covers – survey

Homeowners face more decisions than ever when it comes to purchasing home insurance. Amid increasing rates, complex insurance processes, and a looming threat of natural disasters, US homeowners can greatly benefit from more education, guidance, and support when it comes to securing the right coverage for their most important asset

A new survey by Gooseherd Insurance reveals that two-thirds (65%) of Americans “have no idea” what their home insurance policy fully covers. Nearly half (45%) also said they’ve had an insurance claim denied because they didn’t have the coverage.

Gooseherds’ “Homeowners Insurance Preparedness Report” reveals a stark gap in insureds’ knowledge about their policies, which independent agents are well-positioned to remedy. Conducted by OnePoll between June 22 and June 29, 2022, the survey polled more than 2,000 US homeowners.

“Our findings drive home the point that the insurance process is overwhelming and extremely difficult to navigate for most American homeowners,” said Brian Pattillo (pictured), vice president of strategy at Gooseherd Insurance, a Texas-based independent personal lines agency.

A majority (76%) of US homeowners in the survey said they found the home insurance selection process stressful. Only one in four (27%) shop around for the policy that covers everything they need, and one in five (20%) compared more than five policies before picking the best option, revealing a missed opportunity for homeowners to receive the right coverage at the best price.

The survey also showed a disconnect between what insureds believe is covered by a home insurance policy and what is actually covered:

• Thirty-two percent think flooding from a storm is covered by their home insurance policy;
• Twenty-nine percent believe problems with the home’s foundation are covered; and
• Twenty-seven percent believe termite damage is covered.

About seven in 10 Americans admitted they don’t understand common insurance terms like limit of liability, actual cash value, and identity theft fraud expense