Most coverage gaps aren’t dramatic. They’re small choices made years ago that quietly stopped fitting your life. Here are the five we run into most with Michigan homeowners — and the simple fix for each.
By the Mercer Agency team · 4 minute read
1. Insuring your home for what it’s worth, not what it costs to rebuild
It’s an easy assumption: if your home is worth $350,000, that’s how much you should insure it for. But your policy isn’t covering the market price — it’s covering dwelling coverage (Coverage A), the cost to rebuild from the ground up with today’s labor and materials. After a few hard years of construction costs, those two numbers can be far apart. Insure to the lower one and you could come up short on the only number that matters after a loss.
The fix: Ask for a current replacement-cost estimate, not a market valuation. We run one for you and check it when you renovate or build an addition.
2. Settling for actual cash value on your belongings
When a claim is paid on actual cash value (ACV), the insurer subtracts years of wear and tear first — so a ten-year-old couch pays out like a ten-year-old couch. Replacement cost coverage pays what it costs to buy a new one today. The difference rarely shows up on the quote, but it shows up loudly at claim time.
Good to know
A quick home inventory — photos or a short video of each room — is the single best thing you can do before a claim. It turns “I think we had…” into a settled number.
3. Assuming water damage is water damage
A burst pipe is usually covered. Rising water from a storm, and water that backs up through a sewer or sump pump, usually are not — not without specific add-ons. Standard homeowners policies exclude flood, and water/sewer back-up is an endorsement (an optional rider you add on). In a state with our springs and our basements, that’s a gap worth closing.
The fix: Ask us two plain questions — “Am I covered for flood?” and “Am I covered if my sump pump fails?” If the answer is no and you want it to be yes, both are usually inexpensive to add.
4. Chasing the lowest premium with the highest deductible
A higher deductible — the amount you pay before coverage kicks in — does lower your premium, and that can be a smart trade. But only if you’d comfortably cover that amount out of pocket tomorrow. We’ve seen homeowners pick a $5,000 deductible to save a few dollars a month, then face a claim they can’t afford to file. Pick a deductible that matches your savings, not just your monthly budget.
5. Setting it once and never looking again
A policy is a snapshot of your life on the day you bought it. Then you finish the basement, buy the ring, adopt the dog, start working from home — and the coverage never moved. The biggest mistake isn’t any single line item. It’s letting years pass without a fresh look.
The fix: A 15-minute review once a year. Bundling your home and auto often pays for the conversation by itself.
We manage your risk. You live your life.
If any of these hit close to home, that’s worth a five-minute call. We’ll read your current policy in plain language, point out the gaps, and only change what should change.
Mercer Agency · Insurance for Michigan households and businesses · We only write coverage in Michigan.
