Coverage gaps
The 7 most common homeowners insurance coverage gaps.
Most homeowners are underinsured and don't know it. These are the gaps we see most often when our AI reviews real policies — and the simple checks you can do today.
Underinsured dwelling coverage
Construction costs are up 40%+ since 2019. If your dwelling limit hasn't kept pace, a total loss could leave you tens of thousands short of rebuilding.
No water backup endorsement
Standard HO-3 policies exclude sewer and sump-pump backup. The endorsement usually costs $50–$100/year and covers $5k–$25k of damage that's otherwise on you.
Percentage wind/hail deductible
A 2% deductible on a $500k home is $10,000 — applied per storm, not per year. Many homeowners discover this only after the first claim.
ACV roof instead of replacement cost
Carriers quietly switched many roofs from replacement-cost (RCV) to depreciated actual-cash-value (ACV). On a 15-year-old roof, that can mean a 50–70% smaller payout.
Special-limits caps on valuables
Jewelry, firearms, electronics, cash, and collectibles have sub-limits as low as $1,500 — even if your overall personal property limit is $200k. A scheduled-items rider closes the gap.
Liability under $300k
Default liability is often $100k. A single dog bite, pool injury, or auto-related claim can easily exceed that — and an umbrella policy starts around $200/year for $1M.
No ordinance & law coverage
After a major loss, current building codes (electrical, sprinklers, ADA) apply. Without ordinance & law coverage, you pay the upgrade cost out of pocket — often 10–25% of rebuild.
Why these gaps exist
Insurance policies aren't designed to be confusing on purpose — but they are designed to a price point. Carriers compete on premium, so the easiest way to keep a quote attractive is to lower a limit, swap an endorsement to a cheaper form, or apply a percentage-based deductible that doesn't show up in the monthly cost.
The result is that two policies with identical premiums can leave the homeowner in radically different positions after a claim. The decisions that matter most live on the declarations page — and most homeowners have never read it line by line.
Frequently asked
Am I underinsured?
If your dwelling limit hasn't been re-evaluated in the last 3 years, if your roof is over 10 years old on an ACV endorsement, or if your liability is below $300k, you almost certainly have at least one gap. Upload your declarations page and we'll show you exactly where.
What happens if I am underinsured?
After a covered loss, the carrier pays up to your limit and you pay the rest. With dwelling underinsurance specifically, a 'coinsurance penalty' can also kick in — the carrier reduces a partial-loss payout proportionally. Underinsurance is the single most expensive mistake a homeowner can make.
Can there be a coverage gap on homeowners insurance even if I'm with a major carrier?
Yes. Coverage gaps come from policy form choices (HO-3 vs HO-5), endorsements you didn't add, sub-limits inside the form, and limits that haven't been raised with inflation — none of which depend on the carrier's brand.
How do I check my homeowners insurance for gaps?
The fastest way is to read your declarations page (the 1–2 page summary) and check: dwelling limit vs current rebuild cost, roof endorsement (RCV vs ACV), wind/hail deductible (flat vs %), liability limit, and which endorsements are listed. Or upload it here and we'll do it in 60 seconds.
Check your policy now
Upload your declarations page. No account required. We'll flag every gap above plus anything else our AI catches.
Related reading
General information, not legal or financial advice. Coverage and limits vary by carrier and state.