Insurance Coverage Gaps Checklist — Find What Your Policy Doesn't Cover

Replacement cost is what it would take to rebuild your home from the ground up at today's construction prices. Market value includes land and location. If your Coverage A limit is based on your purchase price or assessed value, you may be 20–40% underinsured. Construction costs rose 30%+ between 2020 and 2024.

Actual cash value (ACV) deducts depreciation. A 5-year-old $2,000 couch might pay out $600 under ACV. Replacement cost value (RCV) pays what it costs to buy a new equivalent item. The premium difference is typically $50–$150/year — almost always worth it.

Many coastal and storm-prone policies have percentage-based deductibles for wind or hurricane damage (typically 2–5% of insured value). On a $400,000 home, a 2% hurricane deductible means $8,000 out of pocket — very different from your regular $1,000 deductible.

Coverage D pays for hotel stays, meals, and temporary housing when your home is uninhabitable. Some policies cap this at 12 months or a percentage of dwelling coverage (typically 20%). After a major disaster, repairs can take 18–24 months.

This is the single most expensive coverage gap in the United States. Standard HO-3 policies exclude flood damage entirely. 25% of flood claims come from outside high-risk zones. NFIP policies have a 30-day waiting period, so you can't buy one when a storm is approaching.

Sewer backups are excluded from both standard homeowner's and flood policies. A backup event averages $10,000–$30,000 in damage. Coverage is available as an endorsement for $40–$100/year with typical limits of $10,000–$25,000.

Many policies exclude mold entirely or cap it at $5,000–$10,000. Professional mold remediation after a water event routinely costs $15,000–$50,000. Consider a mold endorsement if your policy has a low sublimit.

Earthquake damage is excluded from every standard homeowner's policy. If you're in a seismically active area, a separate earthquake policy or endorsement is essential. Deductibles are typically 10–20% of dwelling value.

Settling, cracking, shifting, and earth movement are typically excluded. Foundation repairs average $5,000–$15,000. Sinkholes are excluded in most states except Florida. If your area has expansive clay soils or mining activity, this gap can be devastating.

Standard policies cap theft loss for jewelry at $1,500–$2,500 total. A single engagement ring can exceed this. Schedule (itemize) valuable pieces with appraisals for full coverage, or add a jewelry floater policy.

If you work from home, your employer's equipment may not be covered. Your own business equipment may be excluded or sublimited. A home business endorsement ($25–$100/year) closes this gap.

You can't prove what you owned without documentation. Walk through every room with your phone camera. Photograph serial numbers on electronics, keep receipts for major purchases, and store copies in cloud storage. Insurance companies settle claims based on what you can document.

Standard policies include $100,000–$300,000 in liability coverage. A serious injury lawsuit can exceed $500,000 easily. An umbrella policy adds $1–$5 million of additional liability coverage for $150–$400/year.

If your home is severely damaged, local building codes may require you to rebuild to current standards. Updated wiring, plumbing, insulation, and hurricane straps can add 20–30% to rebuilding costs. Ordinance or law coverage (typically 10–25% of dwelling limit) covers this gap.

Other structures coverage (Coverage B) is typically 10% of dwelling coverage. If your outbuildings are valuable, request a Coverage B increase.