Homeowner's Insurance: What Your Insurer Needs to Know
May 24, 2026
Your Homeowner's Insurance: What Your Insurer Needs to Know
Homeowner's insurance isn't set-and-forget. What's in your policy -- and what you haven't told your insurer -- can matter enormously when you actually need to file a claim.
Your insurer needs to know about major changes to your home. Renovations, additions, a home office, a rental unit, a trampoline, a new dog -- these all affect your coverage and your liability. Not disclosing them doesn't protect you; it gives the insurer grounds to deny a claim.
Review your policy once a year. Your home's replacement cost rises with inflation and construction costs. If your coverage hasn't kept pace, you could be significantly underinsured -- and not find out until after a loss.
Certain conditions in older Cheverly homes can affect your insurability. Knob-and-tube wiring, Federal Pacific panels, oil tanks, and older roofs are all items insurers ask about -- and some will surcharge, exclude, or decline coverage based on them.
When you bought your home, your insurer asked a set of questions and priced your policy based on the answers. If your home has changed since then -- and most Cheverly homes have -- your policy may no longer reflect reality. That gap isn't neutral. In some cases it's the difference between a paid claim and a denied one.
Renovations and Improvements
Adding a bathroom, finishing a basement, updating a kitchen, building a deck -- any significant improvement increases the replacement cost of your home. If your policy limit doesn't reflect the upgraded value, you're insuring a lesser home than you own. That shortfall comes out of your pocket after a loss.
Major renovations should trigger a call to your insurer or agent to reassess your dwelling coverage limit. This is especially true for additions that add square footage -- those are easy for an insurer to verify and hard to explain away if coverage is inadequate.
- Finished basement with bedroom and bathroom -- significant value increase, notify insurer
- Kitchen or bath remodel -- upgraded finishes increase replacement cost
- Addition or sunroom -- added square footage must be reflected in coverage
- New deck or porch -- structures on your property are typically covered under "other structures" up to a limit; large decks may exceed it
If a claim involves an area of the home that was improved without permits, the insurer may deny or reduce the claim on the grounds that the work wasn't code-compliant. This is one of the less-discussed consequences of skipping permits -- it's not just a resale issue.
Home-Based Business or Remote Work
A standard homeowner's policy provides very limited -- or no -- coverage for business property or business liability at your home. If you have significant business equipment, inventory, or clients visiting your home, your standard policy likely doesn't cover it. This became a much more common issue as remote work became the norm.
- Business equipment (computers, cameras, specialized tools) -- standard policies cap business property coverage at $2,500 or less
- Client visits -- if a client is injured at your home during a business visit, your homeowner's liability may not cover it
- Inventory stored at home -- typically excluded from standard coverage
- Home daycare or any licensed business operating from your home -- requires a separate endorsement or policy
Ask your insurer whether a home business endorsement or in-home business policy is appropriate for your situation. These are typically inexpensive add-ons that close a real gap.
Liability Triggers: Pools, Trampolines, and Dogs
Certain additions or circumstances significantly increase your liability exposure and must be disclosed to your insurer. Failing to disclose them doesn't make the liability go away -- it just means you may not have coverage when a claim arises.
- Swimming pools -- most insurers require disclosure; many require fencing, self-closing gates, and pool alarms as conditions of coverage
- Trampolines -- considered high-risk by most insurers; some will exclude trampoline injuries entirely, others will cover with safety net requirements
- Dogs -- certain breeds are excluded from coverage by many insurers; a dog bite claim can be substantial; disclose any new dog to your insurer
- Short-term rentals (Airbnb/VRBO) -- standard homeowner's policies typically exclude rental activity; you need a separate endorsement or policy
- Tree houses, zip lines, playground equipment -- worth a call to your insurer if you're adding these
If you rent your home or a room on Airbnb or VRBO -- even occasionally -- your standard homeowner's policy almost certainly doesn't cover that activity. A guest injury during a rental period could be entirely uninsured. Platform-provided coverage is limited and not a substitute for a proper endorsement.
Older Home Conditions That Affect Insurability
Cheverly's older housing stock has several conditions that insurers specifically ask about -- and in some cases use to surcharge, exclude coverage, or decline to insure altogether. Knowing where you stand is important both for maintaining coverage and for planning improvements.
- Knob-and-tube wiring -- many insurers will not cover homes with active K&T, or will require documentation that it has been evaluated and is not a hazard. Some will insure with a surcharge.
- Federal Pacific or Zinsco electrical panels -- flagged by most insurers; some will not insure or renew until replaced
- Roofs over 20 years old -- many insurers will only pay actual cash value (depreciated) rather than replacement cost for an aging roof; some won't renew policies with old roofs
- Oil tanks (abandoned or active) -- an undisclosed abandoned underground tank is a significant issue; active oil systems may carry a surcharge
- Galvanized steel plumbing -- some insurers surcharge or exclude plumbing-related water damage claims on homes with known galvanized supply lines
If your home has any of these conditions, disclose them to your insurer and understand exactly what your policy covers -- and excludes -- as a result. "I didn't know" is not a defense after a denied claim. Addressing the condition (replacing K&T, upgrading the panel, replacing the roof) often results in a premium reduction that partially offsets the cost.
Insurance policies don't automatically adjust for inflation. Construction costs, labor rates, and material prices have increased substantially over the past several years -- which means a policy that adequately covered your home in 2018 may cover significantly less of it today. This is called being underinsured, and most homeowners don't discover it until they file a major claim.
The right time to review your policy is at renewal -- typically once a year. It takes about 30 minutes and a conversation with your agent. The questions to ask are straightforward.
Coverage questions
- Is my dwelling coverage limit based on current replacement cost -- not market value?
- Do I have guaranteed or extended replacement cost coverage?
- Has my personal property coverage kept pace with what I actually own?
- Are high-value items (jewelry, art, instruments, collectibles) scheduled separately?
- Is my liability limit adequate -- at minimum $300,000, ideally $500,000+?
- Do I have an umbrella policy? (Recommended if you have significant assets)
Home changes to report
- Any renovation, addition, or major improvement completed this year
- New pool, hot tub, deck, or outbuilding
- New dog (especially larger breeds)
- Home business activity started or expanded
- Any short-term rental activity
- Major system replacement (roof, HVAC, electrical panel) -- may reduce premium
- New security system -- often qualifies for a discount
Replacement Cost vs. Market Value -- Know the Difference
This is one of the most common points of confusion in homeowner's insurance -- and one of the most consequential. Your insurance should be based on replacement cost, not market value. These are not the same number, and confusing them leads to being either over- or underinsured.
Market value is what a buyer would pay for your home, including the land. It fluctuates with the real estate market.
Replacement cost is what it would cost to rebuild your home from scratch -- labor, materials, permits -- at current construction prices, not including the land. In most cases this is lower than market value. But after major construction inflation, it can be surprisingly high.
- Ask your insurer whether your policy is replacement cost or actual cash value -- ACV pays depreciated value, which can be significantly less
- Ask specifically about roof coverage -- many policies pay ACV on roofs over a certain age, not replacement cost
- Consider extended replacement cost coverage -- pays a percentage above the policy limit if rebuilding costs exceed your coverage
- Your insurer or agent can run a replacement cost estimate for your home; do this at every renewal
What Standard Policies Don't Cover
Standard homeowner's policies have consistent exclusions that surprise people at claim time. Knowing what's not covered is as important as knowing what is.
- Flood damage -- requires a separate flood insurance policy through the NFIP or a private carrier; basement water from surface flooding is not a homeowner's claim
- Sewer backup -- a backed-up sewer or drain is excluded from most standard policies; a sewer backup endorsement is inexpensive and worth adding
- Earthquake -- separate policy or endorsement required
- Normal wear and tear -- a leaking roof that was simply old is not a covered loss; sudden storm damage is
- Gradual damage -- a slow leak that caused mold over months is typically excluded; sudden pipe burst is covered
- Business activity -- as covered above
- Rental activity -- as covered above
Given Cheverly's aging cast iron drain lines and terra cotta laterals, a sewer backup endorsement is a particularly smart add-on. It typically costs $50--$150 per year and covers cleanup and damage from a backed-up drain or sewer line -- one of the more common and unpleasant homeowner claims.
Vacant Home Insurance
Most homeowner's policies contain a vacancy clause -- a provision that suspends or significantly limits coverage if the home is unoccupied for more than 30 to 60 days. The exact threshold varies by insurer and policy, but the principle is consistent: insurers consider vacant homes substantially higher risk, and standard policies aren't priced for that risk.
This comes up more often than people expect in Cheverly. Estate sales where the home sits empty for months while an estate is settled. Owners who relocate for work before the home sells. Inherited properties. Extended travel. In every one of these situations, the standard homeowner's policy may leave you with little or no coverage and you may not know it until you file a claim.
- Vandalism and break-ins are more likely -- and often excluded under vacancy clauses
- A burst pipe or leak can go undetected for weeks, causing far more damage than it would in an occupied home
- Fire damage is more severe without anyone present to catch it early
- Liability exposure continues -- someone injured on the property can still file a claim
- Squatters and unauthorized entry are more common, and the resulting damage may not be covered
- Most policies define vacancy as 3060 consecutive days without a permanent occupant
- Having furniture in the home does not make it "occupied" under most definitions
- A house being staged for sale but not lived in is typically considered vacant
- A seasonal home or secondary residence may have different rules -- check your policy
- Snowbirds and part-year residents: if you spend four to six months elsewhere -- Florida, Arizona, a second home -- your Cheverly home may cross the vacancy threshold while you're gone. Some insurers treat a primary residence differently than a secondary one, but don't assume. Call your insurer and ask specifically what happens to your coverage during extended absences, and whether a seasonal home endorsement applies to your situation.
This is one of the most common coverage gaps I see in Cheverly transactions. A homeowner passes away, the estate takes months to settle, and the home sits empty the entire time -- often with the original homeowner's policy still nominally in force but the vacancy clause quietly suspending meaningful coverage. The heirs don't find out until something happens. If you're managing an estate with a vacant property, contact the insurer immediately and ask specifically about the vacancy clause and what coverage remains.
My mother-in-law went into the hospital unexpectedly. While she was there, a pipe broke in her 1945 home -- running at roughly 8 gallons per minute, likely for most of the day before anyone knew. A neighbor came by to collect the mail and when she opened the front door, water gushed out onto the porch.
The damage was severe. Walls, floors, and ceilings throughout the house were soaked. The ceiling directly below the bathroom had collapsed into the kitchen. The basement had several feet of standing water. The entire house had to be emptied overnight so crews could first dry the structure, then tear out damaged walls and ceilings, replace them with drywall, and refinish the floors.
Fortunately, the insurance company was up to the task and covered the loss. But the key word is fortunately. Had the policy lapsed into a vacancy exclusion, or had no one checked on the house for another day or two, the outcome could have been very different -- structurally and financially. An occupied home catches a broken pipe in minutes. A vacant one catches it when a neighbor happens to stop by.
If your home will be vacant for more than 30 days, call your insurer before that threshold is reached. Options include: a vacancy endorsement added to your existing policy (if your insurer offers it), a standalone vacant home policy from a specialty insurer, or a builder's risk policy if the home is undergoing renovation while vacant. Costs vary but are typically $500--$2,000 per year depending on the home and coverage level. That's not cheap -- but it's a fraction of what an uninsured water damage or vandalism claim would cost.
Insurance aside, if you're going to be away for more than 30 days, consider having someone housesit -- even occasionally. A trusted neighbor or friend who stops in weekly catches the kind of slow-developing problems that become catastrophic when nobody notices them for a month.
If power is on, modern monitoring devices make remote oversight genuinely practical. Wifi-connected leak detectors placed under sinks, near the water heater, and in the basement can alert you the moment moisture is detected. Smart thermostats show you if the heat has dropped unexpectedly. Indoor cameras let you do a visual check from your phone. None of these replace someone physically in the house -- but they close the gap considerably between visits, and they're inexpensive enough to be a no-brainer for any extended absence.
Not every loss is worth filing a claim for. Insurers track claims history, and frequent small claims can result in premium increases or non-renewal. The general guideline: if the loss is close to your deductible, pay out of pocket. If it's significantly above your deductible, file.
If You Need to File a Claim
- Document the damage with photos and video before any cleanup or repairs
- Make temporary repairs to prevent further damage -- keep receipts, insurers typically reimburse these
- Do not authorize permanent repairs before the adjuster has assessed the damage
- Contact your insurer promptly -- most policies require timely notice of a loss
- If a contractor approaches you unsolicited after a storm, be cautious -- storm chasers who offer to "work with your insurance" often deliver poor work and create complications
- Get your own repair estimates in addition to what the adjuster provides
- Keep a home inventory updated -- photos of each room and major items stored in cloud storage make claims far easier
After any significant weather event in Cheverly, contractors who specialize in storm damage solicit door to door. Some are legitimate. Many are not. Never sign an Assignment of Benefits form that transfers your insurance claim rights to a contractor -- this removes your control over the claim and the repair. Always verify license and insurance before signing anything.
Insurance comes up in almost every transaction I'm involved in -- a buyer's lender requiring an upgraded panel, a seller discovering their aging roof is only covered at actual cash value, an undisclosed oil tank creating coverage complications. The time to understand your policy is before something happens, not after.
I'm not an insurance agent and can't advise on specific policy decisions -- but I can tell you which conditions in Cheverly homes tend to create insurance complications, and that's worth knowing before you list or renovate.
Susan@SusanPruden.com · (301) 980-9409
A lifetime Maryland resident, Susan Pruden has the ideal foundation for selling and buying homes. After 8 years working in just about every facet of the mortgage industry, and several years with her own company specializing in marketing for real estate agents, Susan got her real estate license in 1994. Susan has earned several industry awards. The CENTURY 21 Quality Service Pinnacle Award is based on reviews from Susan's clients and is earned by a very small percentage of agents. She has earned that coveted recognition since 2012
Two others were awarded by the Prince George's Association of REALTORS®. The Distinguished Sales Associate of the Year Award is based on a mixture of community involvement, association involvement and real estate education and designations. The other, the Distinguished Service Award, is for "exceptional meritorious service."
Susan is involved in her local community. She was named Cheverly Volunteer of the Year in 2018, even having June 25th designated "Susan Pruden Day" in the Town of Cheverly. She is also a Commissioner on the Prince George's County Historic Preservation Commission and President of the Cheverly American Legion Auxiliary.
Susan Pruden has lived in Cheverly lived with her husband, Joseph, for almost 30 years.
