We buy homeowners insurance to protect against the high drama of our greatest fears: tornadoes ripping off the roof, fire racing up the stairs, floodwaters lapping at the front porch. But in reality, the worst rarely happens. And even in the event that, say, a tree crushes your deck or an errant baseball shatters your leaded-glass picture window, the damage tends to be minor and the repairs easy to resolve with your insurer. As a result, most of us don’t spend a lot of time thinking about homeowners insurance. We get the coverage when we buy our house and then—unless and until something happens—pretty much put it out of our heads.

“Before the total loss of my home, the only real communication I had with my insurance carrier was when the quarterly or yearly statement was due,” says Fred Wescoe, 73. But when his 15-year-old three-bedroom ranch house in Burnside, Ky., burned to the ground one April afternoon last year, his insurer, USAA, became his best friend.

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An insurance investigator visited the house the next day and reached out daily to keep Wescoe up to date on his claim’s progress. USAA quickly paid cash to cover motel, food, clothing, and other living expenses.

“I didn’t have a toothbrush,” Wescoe recalls.

Eight days after the blaze, USAA direct-deposited his payout to cover rebuilding the house and replacing the contents. The money also covered nine months of living expenses and some other costs, such as removing debris. USAA proved “extraordinary,” he says.

Along with USAA, four other home insurers—Amica, Erie, MetLife, and Auto-Owners—were among the most highly rated in Consumer Reports’ most recent survey of more than 85,000 subscribers. About 7,400 of them, or 8 percent, reported filing claims from 2013 to 2016 with a company on our ratings chart.

Homeowners insurance is consistently among the highest-rated services CR evaluates. But satisfaction with your insurer can breed complacency, and what you don’t know or forget about your policy could catch you off guard when trouble hits. You may discover that you’re not covered in critical areas, or that you’re spending too much. CR has identified 10 insurance surprises, good and bad, to watch out for, and offers smart ways to minimize disagreements over claims and find a better, fairer deal on premiums.

1. You May Be Paying Too Much

Many of our survey respondents stick with the same company for 15, 20, 30, or more years and seldom shop around for new policies. About 9 percent switched insurers in the previous three years, and more than half reported finding a better price. Homeowners insurance isn’t as price-competitive as auto insurance, but you can still save hundreds to more than $1,000 per year in premiums by shopping around.

Take action to save. Homeowners insurance requires a careful assessment of your risks and coverage needs. We recommend working with an independent agent who can compare premiums and isn’t beholden to just one company. Direct-to-consumer sellers, such as Geico and USAA, and captive-agent companies, such as Allstate, Farmers, and State Farm, offer only their own brand. You can find an independent agent at TrustedChoice, a website run by the Independent Insurance Agents and Brokers of America, a trade association.

Make sure the agent uses today’s sophisticated rebuilding-cost software. Carefully tote up your home’s vital statistics—square footage, age, construction material—and ask for a “new quote” reconstruction-value estimate based on the latest costs for labor and materials. Start with our top-rated home insurers and work with the agent to shop for the best-value combination of great service and low price.

2. You May Not Be Covered Enough

About 60 percent of all U.S. homes are underinsured by an average of 20 percent, according to CoreLogic, a company based in Irvine, Calif., that provides data to most major home insurers. Many factors can lead to being underinsured, including rising labor and construction costs, remodeling or additions since the policy was purchased, and errors in the original policy’s property description.

Some homeowners also don’t realize that a standard policy doesn’t cover everything. For example, 56 percent incorrectly think that flood insurance is covered by a standard policy, according to Princeton Survey Research Associates International.

Take action to save. Work with your agent to buy separate flood and earthquake protection. You may also need a separate hurricane policy if you live in a high-risk zone.

Additional add-ons are a must to cover sewer backups or the extra cost of rebuilding according to the latest codes and ordinances. Opt for extended replacement-cost coverage, which typically pays up to 25 percent beyond regular limits to cover the spike in materials and labor prices that often occurs in the wake of natural disasters.

A typical policy covers the structure and outbuildings; the contents of the house; personal liability if you, your family, or pet cause damages to others; and additional living expenses if your house is so badly damaged you need a temporary place to live.

3. Don’t Worry Too Much About Filing a Small Claim

Some people don’t make claims when they have a small loss for fear it will jack up their premiums and cost them more over time. About 22 percent of CR survey respondents said they chose not to file a claim for this reason.

But the survey also found that 57 percent who filed claims of less than $5,000 saw no premium increase.

Home insurers might raise rates by tacking on a surcharge if the loss is above a certain amount, but the thresholds and surcharges vary by company, type of loss, and number of claims filed in a given period. State regulations figure in, too. Texas, for example, prohibits insurers from adding a surcharge unless two nonweather-related claims were filed in the previous policy year.

Take action to save. Ask your agent how much your premium would go up, and for how many years, before filing a claim larger than your deductible. If the claim payout is higher than the annual surcharge times the number of years it would be in effect, then it might make financial sense to file the claim. Among our survey respondents whose premiums increased after a small claim, a majority got snagged for less than $200 per year.

4. You Should Consider Flood Insurance Even If You Don’t Have Waterfront Property

Water is a source of never-ending homeowner grief: 22 percent of surveyed readers were bedeviled by burst washing-machine hoses and overflowing toilets, tubs, and sinks, among other problems. For example, in the Pacific West, water problems within the home caused 43 percent of losses.

By contrast, any water or mud moving or accumulating on the ground outside the home and finding its way inside constitutes flooding, and isn’t covered under a standard policy.

More than 20 percent of National Flood Insurance Program (NFIP) policy claims are filed by homeowners outside of designated Special Flood Hazard Areas, according to the Federal Emergency Management Agency (FEMA).

Heavy rain and hurricanes can cause flooding in low-lying areas and overwhelm storm sewers clogged with debris, and send the runoff toward your home.

You need a separate policy to get flood protection. Nearly one-third of Superstorm Sandy victims with flood damage in 2012 didn’t have it. FEMA estimates that only 30 percent of the homes that are in flood zones have NFIP coverage.

Take action to save. Talk with your agent. He or she can usually sell you NFIP coverage, but it might be pricey due to recent changes in the program. You should also consider a sewer backup add-on, which protects you from damage when liquids run the wrong way through sewer lines.

Backups can be a problem in cities with older sewer systems, where your raw sewage line is connected to the same municipal system that handles storm runoff.

Inspect your home for signs of leaks, including stained ceilings, musty odors, and dampness around pipes and behind appliances that use water. Install “smart” water sensors in potentially leaky areas that will send alerts to your smartphone. Consider linking the sensors to an electronic water shutoff valve that can automatically stop the flow when a leak is sprung.

The Insurance Institute for Business & Home Safety (IBHS) advises homeowners to regularly inspect water hoses and tubing on refrigerators that have icemakers, washing machines, and dishwashers, and replace old rubber with sturdier steel-braided hoses. Make sure to turn off your washing machine’s water supply when it’s not in use and especially when you go on vacation. Replace older screw-type valves on toilet water supply lines with ball valves, which are easier to turn off to stop an overflow. Periodically inspect your attic, roof, and upper-floor walls for weather-related water incursions. “Prevention is the best defense against water losses,” says Sevag Sarkissian, a State Farm spokesman.

5. Animal Damage May Not Be Covered

Another photo-illustration similar to the first one.
Photo-Illustration: Dan Saelinger

Generally speaking, the bigger and more unexpected the beast, the more likely the damage will be covered. So yes for a bear that tears up your house, but no for mice, rats, bats, birds, squirrels, and possibly raccoons, depending on the company and coverage. Small pests are usually specifically excluded as vermin.

Your own pets are also generally excluded if, for example, the new, teething puppy chews up the living room furniture. But if your pet bites someone else or does damage to another person’s home, that’s covered under the personal liability protection part of your policy (though some breeds could be excluded).

Take action to save. Ferret out the presence of vermin by inspecting for (and closing up) entry points from basement to rooftop, under porches, and inside crawl spaces.

6. The Larger Your Claim, the More You’ll Need to Prime for a Fight

Although nearly 80 percent of claimants in our survey reported no hassles with their insurer, homeowners with bigger losses were more likely to run into difficulties.

For example, 6 percent of those with claims of any size disagreed with their insurer over dollar damages compared with 10 percent who had claims of $20,000 or more. Those in the $20K-plus club were also more likely to experience a delay in payout.

Take action to save. Patience, persistence, and legwork are key. Start by documenting your claim with photos and written estimates, and ask your contractor for help in understanding the costs of construction and in dealing with the needs of insurance adjusters. Don’t automatically accept the adjuster’s interpretation of the contract. If he or she says your policy doesn’t cover certain damage, ask to see the specific contract language.

Disagree over the damage amount? Bring your contractor and the insurance company adjuster together to go over the estimate line by line. Still can’t see eye to eye? Ask another independent contractor for a second opinion. A complaint to your state insurance department may help, too. To find yours, go to this map on the website of the National Association of Insurance Commissioners.

Among claimants CR surveyed who found themselves talking to a brick wall, 10 percent hired a public adjuster to fight on their behalf. Adjusters inspect every aspect of the claim and serve the client, not the insurance company. A public adjuster can negotiate for you, for a fee of up to 10 percent or 25 percent, depending on state limits and whether the claim is related to a declared emergency. Find one using the website of the National Association of Public Insurance Adjusters. Look for good references, several years’ experience, and a state license, if required. About 3 percent of claimants who had settlement issues turned to a lawyer. You can find one by going to lawyers.com and typing “property insurance” in the search field.

7. Your Credit History Will Affect Your Rates

Since the 1990s, insurers in 47 states (except California, Maryland, and Massachusetts, where the practice isn’t allowed) have used what’s called a credit-based insurance score to determine, in part, homeowners insurance premiums. They tend to keep the practice a secret. Only 9 percent of our survey respondents said their current home insurer told them about it.

But according to insurance-industry representatives, credit scoring is supposed to be good for homeowners. “Eighty-five percent of consumers benefit from the use of credit scores or are treated neutrally,” says Neil Alldredge, senior vice president of corporate affairs for the National Association of Mutual Insurance Companies, who was citing an independent annual study by the Arkansas Department of Insurance.

But a study that was done in May for the website Insurancequotes found a substantial increase for people with poor credit scores. The study concluded that an insurance premium for a 45-year-old homeowner with a fair credit score would be 36 percent higher than if she had an excellent score, on average nationally. If the homeowner had a poor score instead of an excellent one, her premium would be 114 percent higher.

At least 58 percent of the homeowners insurance claims our readers reported were caused by unpredictable, fickle weather. “It’s hard to see how your credit score affects your likelihood of being hit by a hurricane, hail, or wildfire,” says Birny Birnbaum, executive director of the Center for Economic Justice.

Birnbaum says credit scoring is inherently unfair and discriminatory because the scores are a measure of economic opportunity, which has been historically depressed for minorities and low-income consumers. Consequently, they tend to have lower credit scores on average, he explains, and end up paying more.

But Alldredge says insurance companies wouldn’t use the scores if they weren’t useful in assessing risk.

“Maybe the person with a better credit score replaces the roof regularly rather than waiting for the next hail storm to require repair by the insurer,” he says. “That’s speculation, but there is a correlation, which has been demonstrated by numerous studies.”

Take action to save. Demand to see the credit-based insurance score your insurer generated. (It’s different from the FICO credit score used for lending decisions.) Improve your insurance score by checking your credit report and fixing any errors. Every 12 months, ask your insurer to recalculate your score so you can benefit from improvements. And pay your debts on time.

Request an “extraordinary life circumstances exception” if your credit history was affected by financial problems outside your control, including serious medical problems, divorce, the death or disability of a spouse, or unemployment. Many states have laws requiring insurers to take these events into account. If the exception is granted, the insurer could remove credit scoring from its pricing equation, which should reduce your premium.

8. The Things You Love Most May Not Be Covered

Got an engagement ring from Tiffany? A closet full of Valentinos? A Picasso in the living room? Designer duds and fine jewelry and art will probably exceed the limits of a standard homeowners insurance policy, which covers items like these only up to the policy limit for theft, generally in the range of $1,500.

Same thing for pricey computers, deluxe digital cameras, and high-end sports equipment. “We see bicycles costing $10,000 to $15,000,” says Bill Fitzgerald, vice president of sales and client services at Amica.

Take action to save. For jewelry, furs, and fine art, you need extra protection called a “floater,” a separate policy with a zero deductible that covers accidental loss. “A floater can help consumers recover up to the full value of their loss,” says Luis Sahagun, a Farmers Insurance spokesman. Be sure to get appraisals and list the specific items with your agent.

For other valuables, such as high-end sports and tech equipment, you’ll need an endorsement, a policy add-on that raises coverage limits for certain categories of items. Talk with your agent to determine the best coverage.

9. Beware the Hail Loophole

Hail was the biggest single peril faced by our readers, with 32 percent of surveyed claimants saying it was the reason for their homeowners insurance claim. Smaller hail can shatter windows and dent aluminum siding, but golf- ball-sized stones pelting your property at 80 mph can shred trees and punch holes in your house and vehicles.

Four-inch hail a year ago in Texas penetrated the shingles, the underlying plywood roof sheathing, and the interior ceiling drywall of a client’s house, says Mike Gillerlane, vice president of claims at Amica. “We replaced the entire roof and repaired all of the interior damage,” he recalls.

The standard homeowners policy does cover hail. But cosmetic damage, such as dented but not structurally torn aluminum siding or awnings, might be excluded. Even if your roof needs to be replaced, your payout might be severely limited after deductibles and the age of the roof are factored in.

Take action to save. Avoid insurers that require special percentage deductibles for hail damage, which can mean you’re responsible for a portion of the loss up to 2 percent of the insured value of your home. For a house insured for $400,000, 1 percent equals a $4,000 deductible. Instead, insist on a set dollar deductible for hail damage.

Ask for a policy endorsement that covers cosmetic damage if you live in one of the 26 states in the Midwest, Mountain West, and Central South that CoreLogic has identified as having a high to extreme risk of damaging hail. This extra coverage will pay for the replacement of a dinged roof or siding and for the full siding of your house again even if just one or two sides are damaged.

10. Even If You Rent, You're Not off the Hook

You still need insurance if you rent. About 95 percent of homeowners buy insurance, but only 41 percent of renters do. It’s a good idea—and necessary to protect your personal belongings and for personal liability. A landlord’s policy insures only the rental unit itself.

“Renters often underestimate the value of their possessions,” says Glenn Greenberg of Liberty Mutual. “From technology to furniture to clothing, your possessions could easily add up to $25,000 and more.”

Take action to save. Renters should buy the coverage, which usually costs about $12 to $20 per month depending on the value of their possessions. More landlords are requiring it.

Don’t get caught short. As with homeowners insurance, renters insurance usually doesn’t cover flooding or earthquakes. Unless you’re insured by USAA, as a renter you must buy separate polices to cover losses caused by a flood or an earthquake. Also, if you run a small business out of your rented house or apartment, your computers, printers, and other professional equipment won’t be covered if you don’t carry business insurance.

Editor's Note: This article also appeared in the August 2017 issue of Consumer Reports magazine.