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Most US homeowners misunderstand what their policy covers
A Hippo survey found nearly 4 in 10 homeowners assumed coverage that was not included, and about 1 in 5 of those cases led to out-of-pocket costs.
A new Hippo Insurance Services report highlights widespread gaps in homeowners insurance understanding, saying policy illiteracy is a bigger problem than bad weather. According to the report, nearly four in 10 US homeowners have assumed something was covered and been wrong.
Hippo says that for roughly one in five respondents, the mistaken coverage assumption cost them money out of pocket. The survey, conducted by Centiment between July 13 and 22, polled 1,047 homeowners aged 18 or older, and it found 37% could not confidently explain what their policy covers for weather-related damage.
The report also finds knowledge gaps around deductibles and financial impact from weather-related damage. It says 55% did not know their own deductible without looking it up, and half of all homeowners have paid out of pocket for weather-related home damage in the past three years, including 21% who paid $2,000 or more and 9% who paid $5,000 or more.
Hippo adds that some homeowners are still carrying the costs, and that even with active monitoring of weather alerts, many feel unprepared. It says 22% of those who could not absorb the cost are still in debt, with 71% having held it for two years or more, and that 85% monitor weather alerts while 90% say they feel unprepared for at least one severe weather scenario.