The coverage questions homeowners don’t know to ask

Key takeaways

• Homeowners are confident in their coverage, but confidence doesn’t always equal understanding. While 90% believe their policy provides adequate protection, agents say customers frequently misunderstand key areas such as flood coverage, water-damage exclusions and coverage limits. 

• Coverage conversations are becoming more important as homeowners stay put longer. Forty percent of homeowners now consider their current home their forever home, and 64% have made or plan to make long-term improvements that could affect their insurance needs. 

• Homeowners worry about costly repairs and unexpected damage, but few are using technology designed to help catch problems early. Only 25% have water-leak detection devices and just 15% have technology that monitors electrical-fire hazards. 

• Agents have an opportunity to turn interest into action. Despite low adoption, 81% of homeowners say they would be interested in monitoring technology if it were offered through their insurer, creating opportunities for meaningful conversations to build greater awareness about both protection and prevention. 

Most homeowners feel confident about their insurance coverage. In fact, Nationwide’s latest survey of US homeowners shows that 90% believe their policy provides adequate protection, 89% believe their home is insured to the right value and 84% say they understand the coverage their policy provides.

Those numbers should be encouraging to agents, but confidence and clarity are not always the same thing. 

Insurance is complex. A homeowner may feel confident in their coverage while still having questions about how that coverage applies to specific situations. That’s where agents can provide some of their greatest value. The goal is to help ensure that confidence is rooted in a clear understanding of how coverage may respond when real-life events occur. 

Confidence doesn’t always answer the “what if” questions

Consider flood coverage. More than half of homeowners (56%) say they are confident their homeowners policy covers flooding. Yet agents identify flood coverage as one of the most common areas of misunderstanding among customers. In fact, 52% of agents say customers often overestimate what their homeowners insurance policy will cover. Most homeowners don’t spend their time thinking about exclusions, endorsements, or policy language.  

Nationwide’s homeowner and agent research found that agents most frequently cite misunderstandings around: 

• Water-damage exclusions or limitations (44%) 

• Flood coverage (39%) 

• Coverage limits (38%) 

• Sewer or water backup coverage (36%)

Turn policy language into real-life scenarios

Rather than asking customers whether they understand their policy, agents can use scenarios to uncover assumptions and create more productive conversations. 

Questions such as these can help bring coverage into focus: 

• If heavy rain caused water to enter your home, what would you expect your policy to cover? 

• If a pipe burst while you were away, what expenses would you expect the policy to help with? 

• What would happen if a sewer or water service line failed? 

• Have improvements to the home changed its value or rebuilding cost? 

• What deductible would you feel comfortable paying after a loss? 

These discussions aren’t about looking for gaps. They’re about helping customers connect their expectations to the realities of their specific policy, property and location. 

Why these conversations matter more today

According to the survey, 40% of homeowners say they didn’t originally expect their current home to become their forever home, but now believe it will be. At the same time, 64% have made or plan to make changes that support living in their home long term. Together, those findings suggest many homeowners are staying put longer than expected and investing more heavily in the homes they already own. 

Over time, a home may have been renovated, a basement converted into a home office, a kitchen remodeled or key systems such as plumbing, electrical, and roofing updated or aged. Rebuilding costs may have changed as well. 

Common review triggers may include: 

• A renovation or major home improvement 

• Aging roofing, plumbing, HVAC or electrical systems 

• A change in how long the homeowner expects to stay in the home 

• A severe weather event or emerging local risk 

• Rising repair, maintenance or insurance costs 

That’s why some of the most valuable coverage conversations happen after a major life event, home improvement project, or change in long-term plans. Increasingly, those conversations may also include ways homeowners can help prevent losses before they occur. 

The smart home technology conversation homeowners may not know to start

Most homeowners don’t spend much time thinking about water-leak sensors or electrical-monitoring devices. They do, however, worry about costly repairs and unexpected damage. 

Nationwide’s research found homeowners are interested in prevention. Many just haven’t taken the next step. 

Adoption remains relatively low:

• Only 25% of homeowners have water-leak detectors or automatic shut-off devices 

• Just 15% have technology that monitors electrical-fire hazards 

Interest and awareness tell a different story:

• 81% say they would be interested in devices that monitor water, plumbing systems or electrical-fire risks if their insurer provided them at no cost 

• Only 51% of homeowners are familiar with technology that monitors an entire home’s electrical system 

• Just 47% know solutions exist to monitor an entire plumbing system 

Those findings create an opportunity for agents to educate homeowners about tools that can help detect problems earlier and potentially prevent losses before they happen. Some insurers, including Nationwide, offer smart home programs such as LeakBot or Phyn for water-leak detection and Ting for electrical-fire monitoring, often at no additional cost to eligible policyholders. More importantly, these conversations can help homeowners better understand their risks and the proactive steps they can take to protect their homes. 

Help homeowners make informed choices

Research shows that homeowners continue to rely heavily on agents for guidance. Nearly three-quarters (74%) say they count on their insurance agent when reviewing policies, increasing limits or considering additional protection. 

That trust creates an opportunity to serve as more than a policy expert. Agents can help homeowners better understand their coverage, identify emerging risks, and explore ways to protect their homes before problems occur. 

Whether discussing flood exposure, water-backup coverage, rebuilding costs or smart-home technology, the most valuable conversations help homeowners connect their risks, their protection options, and the actions they can take to better protect their homes. 

Most customers already feel confident in their coverage. The opportunity for agents is to help turn that confidence into clarity. By connecting coverage decisions, prevention strategies and real-world risks, agents can help homeowners make informed choices and better protect what matters most. 

Find out how to enroll your customers, check eligibility and learn more about smart home sensors.