The Truth
Your policy was
written by their
lawyers. Not yours.
Every insurance policy is a legal contract drafted by the carrier's legal team. Most policyholders never read it in full — and most who do struggle to understand what it actually says.
60%+
of US homes are underinsured for their actual rebuild cost
Source: CoreLogic / Consumer Federation of America
65%
of homeowners say they have no idea what their policy fully covers
Source: Goosehead Insurance survey, 2,000 homeowners, 2023
56%
of homeowners don't know flood damage is excluded from standard policies
Source: Trusted Choice / Big "I" survey, 2024
86%
think they understand their policy — but most can't answer basic coverage questions correctly
Source: Trusted Choice / Big "I" survey, 2024
Read more
These practices are legal and common — but rarely explained.
Fact
Policies Are Written at a High Reading Level
Research from the University of Nottingham found that most insurance policies require graduate or post-graduate reading level to fully understand — and that comprehension among real policyholders ranged from just 32% to 66%.
Fact
Agent Compensation Is Tied to the Sale
Independent agents earn commission on premium sold. Captive agents are employed by the carrier. Neither has a legal fiduciary duty to ensure the policy fits your specific situation — that responsibility stays with you.
Fact
Sublimits Are Not Highlighted
Your policy may show $200,000 in personal property coverage and a $3,000 sublimit on jewelry theft buried in Section I. Carriers are not required to call out sublimits. Most policyholders discover them only after a claim is affected by one.
Fact
Replacement Cost Doesn't Mean Unlimited Coverage
Replacement cost coverage pays to rebuild with like kind and quality materials at the time of loss — up to your policy limit. If your dwelling limit is $400,000 and rebuild costs are $580,000, you have a $180,000 shortfall.
Fact
Flood and Earthquake Exclusions Are Rarely Discussed
Standard homeowners policies exclude flood and earthquake. Neither carrier nor agent is required to proactively tell you. The 56% of homeowners who don't know flood is excluded often find out at claim time.
Fact
Documentation Requirements Are Strict
After a major loss, most policies require a sworn proof of loss within 60 days of carrier request — a detailed inventory of everything you lost with values. Most policyholders have no inventory, no photos, and no receipts. Without documentation, claims can be reduced.
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