Millions of Homeowners May Be Underinsured Due to Secondary Structures: ZestyAI

A recent analysis by ZestyAI has revealed a significant issue in homeowners’ insurance coverage. Millions of properties across the United States may be underinsured due to unreported or inadequately covered secondary structures. These structures, such as detached garages, sheds, barns, and accessory dwelling units (ADUs), are often overlooked during the insurance underwriting process, leaving homeowners vulnerable to financial losses in the event of damage.

Using artificial intelligence and aerial imagery, ZestyAI analyzed one million residential properties nationwide and found that a substantial percentage include multiple structures. Many of these structures are either improperly insured or not insured at all, posing a significant challenge for both homeowners and insurers. The lack of visibility into these secondary structures can lead to unexpected claims and elevated risks for insurance companies.

The prevalence of multi-structure properties varies significantly by region. States with strong agricultural sectors, such as Montana and Wyoming, report the highest prevalence of properties with multiple structures. In contrast, states like Georgia and North Carolina have the lowest prevalence of secondary structures. Densely populated areas like California and Rhode Island are seeing an increase in ADUs due to evolving zoning laws, contributing to the rise in multi-structure properties.

Understanding the full scope of a property’s structures is critical for accurate risk management by insurers. Advanced analytics, such as those provided by ZestyAI, can help insurers ensure comprehensive coverage while managing risk effectively. By leveraging AI-driven insights, insurers can better protect their customers and provide more accurate and adequate coverage for all structures on a property.

The findings from ZestyAI highlight the importance of advanced analytics in the insurance industry. As secondary structures continue to rise, particularly in urban areas with changing zoning laws, ensuring accurate property assessments and comprehensive insurance coverage has never been more vital. Homeowners are encouraged to review their policies and ensure that all structures on their property are adequately covered to avoid potential financial losses.