The 5 Most Common Gaps We See In Massachusetts Home Insurance Policies

If you're a homeowner, you may assume that home insurance is set-and-forget. That once it’s in place, you're protected and done. But in reality, one of the most expensive realizations homeowners have is discovering coverage gaps in their existing homeowners' insurance policy when they experience a claim. These small oversights, if not addressed, could cost a homeowner tens of thousands of dollars in the event of a loss.

Let’s walk through the five most common coverage gaps we find at Oak Grove Insurance when reviewing Canton, Norwood, and Sharon home insurance policies. 

These gaps rarely exist because homeowners were careless. More often, they develop naturally over time. Policies go years without being reviewed, homes are updated without adjusting coverage, and many homeowners simply accept default limits without realizing how their risk evolves. Life changes, and insurance coverage often doesn’t keep pace.

Dwelling Coverage That Matches Your Purchase Price, Not The Rebuild Cost

When reviewing home policies, the biggest gap we see over and over again is that the Coverage A - Dwelling Limit is outdated. This is especially common for homeowners who have gone three or more years without reviewing their home insurance policy.

Dwelling coverage protects against covered losses to the interior and exterior of your home, including the roof, siding, kitchen, and bathroom. When homeowners think, “Am I covered if my house burns down?”, they are referring to this portion of the policy. The truth is, your dwelling coverage limit should be enough to rebuild your home from the ground up at a minimum. Construction costs can fluctuate, and sometimes homeowners forget to notify their insurance providers of home updates, remodels, or additions.

With that in mind, there are two ways that you can prevent a Coverage A - Dwelling Limit gap:

1. Revisit your home's replacement cost estimator every few years. This helps to ensure that your coverage limit keeps pace with changes in construction costs and that any updates to the home are accounted for. And, 
2. Add a Dwelling Coverage Extension endorsement to your policy. This extends your Coverage A - Dwelling Limit by an additional 25%, 50%, or 100%. Some policy endorsements will even guarantee replacement cost, regardless of the final price to rebuild.

Water Damage That Isn’t Covered

The most common type of home insurance claim is due to water damage, even when flood is excluded. Leaks, burst pipes, and frozen pipes are some of the first images that come to mind. But here’s another common cause of water damage that is not covered by a standard homeowners policy: water/sewer backup.

Water/sewer backup is wastewater that flows back into your home through pipes, drains, or toilets. It’s commonly caused by clogs, roots, and sump pump failures.

Mitigating this coverage gap is especially important for homeowners with a fully or partially finished basement, or who store a significant amount of personal property there. You can close this gap by adding a water/sewer backup endorsement to the policy.

The Hidden Risk Beneath Your Front Lawn

Now we know the potential for coverage gaps when it comes to water damage inside the home. But what about plumbing outside the house? The majority of homes in Canton, Sharon, and Norwood have water and sewer lines running from the street to their home.

Who’s responsible for repairing this waterline under your front lawn? The homeowner! The town is responsible for the waterline up to the curb. When the waterline and sewer lines reach the front yard, they become the homeowner's responsibility. These utility lines typically last about 80 years but are susceptible to damage from tree roots. Once a waterline or sewerline breaks, it must be excavated and replaced. Based on claims we’ve helped clients with, replacing these lines is typically around $10,000. And it’s not covered by a standard Massachusetts home insurance policy.

There is a simple way to mitigate this common coverage gap and avoid costly out-of-pocket expenses: add Service Line coverage to your home insurance policy.

Most home insurance providers offer a Service Line endorsement that provides up to $10,000 in coverage to replace an underground utility line. Some providers also include coverage for the electrical line connection to the utility pole.

Jewelry, Golf Clubs, And Valuables Without Coverage

Most new home buyers we speak to in Massachusetts often think their policy provides too much personal property coverage. Depending on the provider and the policy type, the personal property coverage is typically either 50% or 70% of the Coverage A - Dwelling Limit. A home with a Coverage A - Dwelling Limit of $500,000 will have either $250,000 or $350,000 under the standard homeowners policy. And that definitely sounds like a high number if you're moving from a 750 sq ft apartment into your first home.

The cost of replacing all your belongings adds up fast—furniture, clothing, shoes, pots & pans, appliances, children’s toys, holiday decorations, and more. Despite how large these numbers sound, we often find that when clients conduct an inventory of their personal property, they find they may be underinsured.

And even if your personal property coverage limit is much higher than the cost to replace everything you own, your valuables may not be fully covered. Valuables are subject to sub-limits, limiting coverage for an individual valuable from $1,500 - $2,500, depending on the type of valuable.

What do we mean by valuables? We’re certainly talking about jewelry, artwork, and collectibles. Camera equipment and sporting equipment, such as golf clubs and road bikes, are also considered valuables and are subject to sub-limits.

Without fixing this common coverage gap, you’d likely only receive $1,500 if you needed to file a claim for a stolen $15,000 engagement ring. And a $35,000 engagement ring? Still just $1,500.

To close the coverage gap for your valuables, consider adding them to your home insurance policy as scheduled items. This ensures they are covered up to the agreed-upon amount, and scheduling the items often expands coverage for each item. Curious if your personal property coverage is sufficient? Take an inventory of your household’s personal belongings to determine the cost to replace everything. This should indicate whether or not you may need to increase your coverage limit.

Liability Limits That Are Nowhere Near Realistic

Not all coverage gaps involve physical damage. Some of the most financially devastating gaps involve liability. We live in a litigious society, and most of us are completely unaware of the risk that surrounds us. Need some examples? Check out Boston Legal, Suits, and Better Call Saul. Even the average Joe needs adequate protection from a potential lawsuit, both frivolous and legitimate alike.

In the event of a lawsuit for a covered claim, your liability coverage helps to cover the cost of your legal representation as well as any damages assessed against you by the court. As you can imagine, this number can climb very quickly. A judge can order you to pay a judgment through the liquidation of your savings, investments, and retirement accounts. A portion of your home equity may also be subject to a judgment. And, a judge can order that your future wages be garnished until the judgment is satisfied.

We still run into home insurance policies with a liability limit of only $100,000! In the event of a $150,000 lawsuit, the homeowner would pay $50,000 out of pocket, not including lawyer fees.

We have a two-step process for mitigating a potential liability limit coverage gap:

1. Raise your home insurance liability limit to $500,000. Given the value of most Massachusetts homes and the life stage of most homebuyers, very few homeowners would be considered “overinsured” with a $500,000 liability limit
2. Determine your overall liability coverage need. For most households, you should ensure that your liability coverage exceeds double the amount of your net worth. Please note that this may differ for high-income earners or households with additional risk factors, such as investment property.

If you find that your liability risk exceeds $500,000, we recommend exploring an umbrella policy. An umbrella policy offers additional liability coverage over all your personal insurance policies, including auto, landlord, motorcycle, and RV.

Bonus: No ‘Ordinance Or Law’ Coverage

We said we’d provide you with five of the most common coverage gaps we see at Oak Grove Insurance, but this one’s too important to go unmentioned: Ordinance or Law.

One reality of living in New England is that most of the homes are older. It’s part of the charm! But if your same home were rebuilt today, it likely wouldn’t be compliant with modern building codes. These codes have changed over time to ensure health, safety, and energy efficiency for new homes and home additions.

A standard home insurance policy is designed to make you whole again in the event of a covered loss. For home damage, this means rebuilding or repairing your home to its condition just before the loss. But what if building codes require an additional egress, and your home’s foundation needs to be expanded to accommodate it? What if a DIY heating ductwork project from the 1970s needs to be replaced? The additional costs to comply with modern building codes would likely need to be paid out of pocket.

This type of headache is unnecessary when you’re already managing the inconvenience of home repairs. The best way to address this coverage gap is to include Ordinance or Law coverage on your home insurance policy.

Protecting What Matters Before You Need It

Navigating a homeowners insurance policy and determining whether it truly reflects your current level of risk can be confusing. Most homeowners do not intentionally choose inadequate coverage. They simply assume what they have in place is sufficient. But the reality is that homes change, lifestyles change, and risk changes too. When a policy is not reviewed periodically, coverage gaps can quietly develop over time.

Even small adjustments to your policy can make a meaningful difference when it matters most. The goal is not to design coverage for today. It is to ensure your policy holds up when you experience a loss. The decisions you make now directly impact how protected you will be in a worst-case scenario.

At Oak Grove Insurance, we believe in proactive, no-pressure coverage reviews that help homeowners make informed decisions based on their actual risk profile, not assumptions or outdated limits. We work with homeowners throughout Canton, Norwood, Sharon, and across Massachusetts. If you believe your current policy could benefit from a second set of eyes, we would be happy to provide a no-obligation coverage review.

Key Takeaways: Common Home Insurance Gaps Every Massachusetts Homeowner Should Understand

• Your home insurance coverage should reflect the cost to rebuild your home, not what you paid for it or its current market value. An outdated dwelling limit can leave you significantly underinsured after a major loss.
• Standard homeowners policies often exclude water and sewer backup. Without a specific endorsement, damage from these events can result in substantial out-of-pocket expenses, especially for homes with finished basements.
• Most homeowners are responsible for the underground utility lines running from the street to the home. A standard policy does not cover service line repairs and can result in high out-of-pocket costs if this coverage is not added.
• Personal property coverage limits may seem high, but sub-limits often restrict how much you can recover for valuables such as jewelry, artwork, golf clubs, and specialized equipment unless those items are scheduled.
• Liability limits on many home insurance policies are far below what is needed to help protect personal assets and future income. Increasing liability limits and considering an umbrella policy can significantly reduce financial exposure.
• Ordinance or Law coverage is frequently overlooked, especially for older New England homes. Without it, homeowners may be forced to pay out of pocket for code-required upgrades after a covered loss.