Policyholders still confused about what home insurance covers

Confusion about what is and isn’t covered by home insurance continues among policyholders, according to Goosehead Insurance, Inc., which found that 45% of U.S. policyholders have had a claim denied because they didn’t have proper coverage.

Further, 65% of policyholders said they “have no idea what my home insurance fully covers,” Goosehead’s survey of 2,000 American homeowners found.

“Consumers are in need of an easier way to both understand and navigate an often complex insurance process, so they ultimately secure the right coverage at the best price,” Brian Pattillo, vice president at Goosehead Insurance, said in a release. “With shifting market conditions and increasing extreme weather afoot, an independent agent is well-positioned to do the shopping for you, comparing the results and identifying the best protection from the unexpected.”

Additionally, 7 in 10 Americans said they don’t understand insurance terms such as “limit of liability,” “home insurance replacement cost,” “actual cash value” and “independent agent.” Around 16% of Americans said they don’t know the meaning of any insurance-related terms.

With confusion abounding, it is no surprise that 76% of American homeowners said they have experienced some form of stress while shopping for coverage. Driving this stress is the fact that 31% of survey respondents said insurance policies are impossible to read, while 19% cited the number of options to choose from.

Shopping attitudes

The survey also found that 41% of policyholders consider getting the best coverage the top priority when shopping for home insurance. Slightly less than a quarter prioritize policy options based on what their mortgage company requires, while 16% prioritize finding the lowest rate.

When it comes to their current policy, 26% of policyholders said the type of coverage was the most important factor when selecting a policy. Around 22% of policyholders said the insurance brand’s name was the most important factor when making. In terms of importance, coverage type and brand name beat out the ability to complete the process online and the price of the policy, Goosehead reported.

Related:

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• Most young homeowners expect damage from extreme weather
• The P&C industry’s most common compliance, conduct complaints