At our agency, we recently worked on a quote for a homeowner who ultimately decided not to purchase from us. The reason? They didn’t like what we had to tell them. But in insurance, the truth isn’t always what people want to hear—it’s what they need to hear.
Roof Coverage: The Hidden Risk
The first red flag we noticed in their current policy was that their shingles were subject to a roof payment schedule. This meant that if they ever needed to file a roof claim, their payout would be depreciated by over 50%, on top of their deductible.
We explained that their current insurance company actually offers an endorsement for full replacement cost, which would have protected them from this costly depreciation. However, they quickly told us that they used to have that endorsement—but after a rate increase last year, they called their agent to lower their premium. Their agent removed the endorsement, without explaining that it directly affected their roof coverage. The client mistakenly believed it only inflated the home’s insured value and didn’t realize the hidden cost of this change.
Underinsured by Over $100K
Unfortunately, that wasn’t the only issue. After reviewing their policy further, we discovered that their home was underinsured by over $100,000.
Their response? They didn’t believe it would cost that much to rebuild, so they were comfortable leaving it as is.
But here’s the reality: People almost always underestimate the cost to rebuild their home.
Most homeowners arguing these numbers have never built or rebuilt a home. Even as an insurance professional, I wouldn’t make an educated guess—I rely on Reconstruction Cost Estimators. These are tools purchased by insurance companies from independent organizations specializing in construction and labor data. These estimators ensure that homes are properly insured to value based on current material and labor costs.
The Real Takeaway
So what’s the lesson here?
If you call your agent and ask them to lower your rate, make sure you understand what coverages are being removed.
Many agents focus more on keeping your business (and their commission) than ensuring you have proper protection.
The cheapest policy isn’t always the best policy—it’s about making sure you’re covered when it matters most.
Get a Coverage Checkup
Your home is one of your biggest investments. Are you confident it’s properly insured?
If you’re unsure, let’s talk. We can review your policy and help make sure you’re protected, not just paying premiums. Contact us today for a coverage review!
