Majority of homeowners could be left unprotected in the event of a disaster

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Feb 22, 2023, 10:01 ET

New survey finds more than half of U.S. homes may be underinsured due to higher rebuild costs and
inflation

NEW YORK, Feb. 22, 2023 /PRNewswire/ -- Despite record high home construction costs, costly catastrophes, and general inflation in 2022, a majority of homeowners (56%) have not reviewed their home insurance policies in the past 12 months. This means they may be leaving themselves without enough coverage to rebuild their home after a disaster.

The new Policygenius Home Insurance & Inflation Shopping Survey also found 83% of homeowners either don't have or aren't sure if they have inflation guard coverage — a crucial coverage feature that automatically increases your home's insurance amounts each year to keep pace with inflation. Only one-third of homeowners (33%) said they are "very sure" their homeowners insurance coverage amounts are high enough to cover their home's entire rebuild cost.

Other findings from the Policygenius Home Insurance & Inflation Shopping Survey include:

A mere 9% of homeowners have increased the dwelling coverage limits on their home insurance policy in the last year, an important step to account for rising construction costs and inflation.
More than two in three homeowners (68%) may not have guaranteed replacement cost coverage, and 80% may be without extended replacement cost coverage — two important coverage add-ons that buffer the impacts of demand surge and higher rebuild costs after a disaster.
44% of homeowners reviewed their policy in the past 12 months. These homeowners were more likely than those who did not review their policy to:

Increase their home's coverage limits
Take action to lower their rates
Have at least one coverage feature in their policy that accounts for high rebuild costs
Be "very sure" their insurance coverage amounts are high enough to cover the entire cost of a rebuild

"Our survey found that the vast majority of homeowners are not adequately prepared and that's really concerning. Construction costs on single-family homes were up nearly 17% in 2022, yet our survey found that just 14% of homeowners increased their insurance limits or added coverage features to account for this," Pat Howard, licensed property and casualty insurance expert at Policygenius, said. "Most people are aware of how prices have skyrocketed over the last two years, but one of the most overlooked impacts of inflation is how it has caused homes to be underinsured, which happens when a home's insurance coverage isn't high enough to pay for a full rebuild after a disaster. It's important to talk with your insurance provider and ensure your coverage limits are adequately adjusted each year."

Policygenius commissioned YouGov to poll 2,542 American adults (aged 18+), 1,264 of whom confirmed owning a home with a homeowners insurance policy. The survey was carried out online from Jan. 19 through Jan. 23, 2023. The results have been weighted to represent all U.S. adults. The margin of error was between +/-1.4% and +/-4.2% depending on the question. Percentages were rounded to the nearest whole number, so some totals may not add up to 100. You can see more data and the full methodology in the Policygenius Home Insurance & Inflation Shopping Survey report.

About Policygenius
Policygenius transforms the insurance journey for today's consumer, providing a one-stop platform where customers can compare options from top insurance carriers, get unbiased expert advice, buy policies, and manage their insurance portfolio, in one seamless, integrated experience. Our proprietary technology platform integrates with the leading life, disability, and home and auto insurance carriers and delivers an exceptional digital experience for both consumers and insurance carriers. Since 2014, our content, digital tools, and experts have served as a resource for millions of people on their insurance journey, and we have sold more than $170 billion in coverage.

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For more information:
Brooke Niemeyer
Associate Director of Media Relations
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SOURCE Policygenius