The vast majority of US homeowners express concern about protecting their homes and personal property, yet large numbers have never verified what their insurance policy actually includes, according to new research from The Hanover Insurance Group.
According to The Hanover's 2026 Home Report: The Coverage Confidence Gap, 90% of respondents are concerned about protecting their homes and belongings, even as significant gaps persist between what homeowners want and what they know they have.
The survey also found that 46% of homeowners had not verified whether their policy includes identity fraud protection, which covers the costs of restoring identity after theft or fraud. Some 41% had not confirmed whether service line coverage, which pays for the repair or replacement of underground utility lines such as water or sewer pipes, was part of their policy.
Meanwhile, water backup coverage, which applies to damage from backed-up drains or sump pump overflow and is distinct from flood insurance, had not been verified by 38%. Even personal property replacement cost, one of the more commonly discussed policy features, had not been checked by 24%, the report said.
The research also made clear that the problem is not a lack of interest in protection. Some 81% of respondents said comprehensive coverage with no gaps or surprises was absolutely essential or very important, and 74% said they would prefer a broader policy even at higher cost. The disconnect lies between what homeowners want and what they have taken steps to confirm.
The findings arrive at a challenging moment for the homeowners' market. Home insurance premiums are projected to break the $3,000 national average in 2026, climbing for a fifth consecutive year, with analysts warning that affordability and access remain constrained due to rising premiums and climate-related losses.
Auto and homeowners' insurers face rising claims costs driven by higher prices for imported repair parts and construction materials such as lumber, with the US P&C combined ratio expected to worsen from 97.2% in 2024 to around 99% in 2026.
The stakes around identity fraud coverage are also rising sharply. The National Insurance Crime Bureau projected a 49% rise in insurance crime linked to identity theft by the end of 2025, with synthetic identities now involved in nearly a quarter of referred claims. Standard homeowners' policies do not cover financial losses from identity theft, making the endorsement, typically available for between $25 and $60 a year, one of the more cost-effective protections available.
The survey reinforces the value of proactive client engagement. Independent agencies sold 87% of commercial lines insurance in 2025, up from 83% a decade ago, with the channel proving resilient despite years of predictions about direct-to-consumer disruption.
The homeowners' market also represents a comparable opportunity - agents who conduct regular coverage checkups are well-positioned to help clients reassess limits and identify gaps before a loss event occurs, particularly as the homeowners market stabilizes and rate growth moderates.
Meanwhile, add-on coverages such as service line, water backup, and identity fraud protection also generate incremental premium revenue for carriers while ensuring that claims are handled within the policy rather than becoming out-of-pocket disputes that erode customer relationships.
Daniel Halsey, president of personal lines at The Hanover, said: "For many people, a home is their most important asset. Homeowners want confidence their insurance will protect them when it matters most, yet many aren't fully certain what their policies include. While price will always be a factor, choosing coverage based on cost alone can leave people under-protected and facing higher out-of-pocket expenses after a loss."
