What This Winter Is Revealing About Gaps in Home Insurance Coverage

As housing costs remain elevated across the country, winter weather, particularly along the East Coast, has shed light on a growing vulnerability for homeowners: gaps in home insurance. 

Unfortunately, home insurance hasn’t kept up with increasing home values and rebuild costs, despite premiums increasing in many places.

As the winter months start coming to a close, freeze-thaw cycles typically lead to a rise in snow and ice-related claims, highlighting outdated dwelling limits, actual cash value roof settlements, and exclusions that result in hefty, unforeseen expenses for many homeowners. Home insurance claim frequency, overall, has shot up about 17% over the past several years.

“Roofing costs have also increased significantly in recent years. Materials, labor, and supply chain issues as well as regional weather changes have all driven up replacement costs. And increased hail and tornado activity has led to a much higher frequency of losses,” explains Chris Bacon, chief operating officer at Openly in Boston.

By being proactive and well prepared for winter weather, you can ensure adequate home insurance coverage and reduce the risk of unexpected out-of-pocket costs and headaches down the road.

When do snow and ice claims occur?

Water damage and freezing temperatures make up about 22% of all home insurance claims. Furthermore, roof repair and replacement costs hit almost $31 billion in 2024—a 30% spike since 2022—illustrating why the majority of winter-related claims are filed within two weeks of an event. 

“Common losses like burst pipes, ice dam leaks, and fallen trees are usually immediately apparent to the homeowner, hence the quick claim filing,” says Bacon.

That said, there are exceptions, especially when the home is vacant or is used as a vacation or secondary property and no one is present to notice damage. 

This is usually more common during events like this year's Winter Storm Fern or when prolonged freezes delay melting.

Why full-coverage home insurance matters

Home insurance is all about protecting against the kind of financial losses you might not be able to cover on your own.

“Its value lies in converting unpredictable financial or catastrophic risk into a predictable, manageable cost. Insurers match this risk to price,” explains Bacon.

As more homes are built in higher-risk locations, it becomes more complicated to insure larger, higher-value homes against catastrophic risk. 

This often results in financial trade-offs between how much catastrophic risk you’re willing to bear and how much you’re willing to pay in insurance premiums to cover it.

In many cases, it makes sense for homeowners to invest in an HO-5 policy as it offers comprehensive protection and fewer coverage gaps than a basic or HO-3 policy. This is particularly true for those in high-risk weather areas or places with high rebuilding costs. 

So, how much would HO-5 coverage cost you? It really depends. Homeowners insurance premiums vary significantly by location, home characteristics, associated risks or perils, and rebuild cost. They have, however, increased by about 53.1% over the past five years or so.

Larger or customized homes, and homes in high-risk locations such as coastal areas prone to hurricanes or remote properties far from fire and emergency services, typically incur higher costs than standard suburban homes. 

“The short answer is that full coverage looks very different depending on where you are and what you are insuring,” explains Bacon.

According to Hippo Insurance, the average premium for HO-5 coverage is about $1,412 per year, or $118 per month. In comparison, the average rate for an HO-3 policy is closer to $1,272 per year. 

It’s a good idea to shop around and compare home insurance quotes to zero in on the right coverage for your unique budget, risk tolerance, and priorities. You can also work with an independent insurance agent to determine your needs and find a plan that meets them.

What to do before peak winter seasons

As a homeowner, it’s your responsibility to anticipate winter-related home damages before they happen.

First, assess your roof’s age and condition as older roofs are more vulnerable to adverse weather conditions. Depending on your findings, your roof may be due for a repair or replacement. If you’re unsure, reach out to a reputable roofer for guidance. 

“Then, review your homeowners coverage, including limits, deductibles, and schedules. Determine whether your policy works or needs to be changed. This is essential to financial preparedness in the event of a loss,” explains Bacon.

Bacon also recommends being proactive and addressing high-risk outdoor surroundings. For example, if you notice a tree that’s about to fall, take care of it before the winter as it has the potential to cause significant damage to your home.

Finally, always pay attention to the forecast.

“Whenever extreme freezes are expected, make sure your outdoor pipes are drained and covered. Don’t forget to keep the heat on and let faucets drip,” advises Bacon.