What coverage gaps should I watch for when bundling?

Complete Guide to Coverage Gaps When Bundling Home & Auto

Why This Question Matters for Colorado and Utah Residents

Bundling home and auto insurance delivers savings—11% to 26% in Northern Colorado and Utah on average—but missing the fine print can undermine protection and lead to major out-of-pocket expenses. This is especially true here, where severe hail, wildfires, and rising rebuilding costs put real pressure on both bundled and standalone policies.

• Severe Weather is Common: Northern Colorado leads the nation in hail claims, and Utah’s Front Range counties see frequent wind and wildfire events—coverage gaps here are costly.
• New Deductible Structures: 70% of bundled policies in Colorado now use percentage-based deductibles for hail and wind, growing your out-of-pocket from $1,000 to $3,500+ overnight on a $350,000 home.
• Carrier Market Changes: With 32% of regional insurers reducing coverage, bundled policyholders are more likely to be retained—but that doesn’t guarantee quality if policy details aren’t reviewed closely.

What Most People Get Wrong

Many believe a bundle automatically provides “better coverage” across the board or that savings can offset all risk—but accepting the default bundle too quickly can result in lower limits, step-down roof coverage (ACV), or increased deductibles.

There’s also a misconception that claims are always simpler with a bundle, but if key coverages are reduced for the sake of savings, claim time is when families feel the real sting.

The Complete Picture

Bundling streamlines paperwork and offers real cost savings—FoCoIns policyholders average $600 annual bundle discounts in CO/UT—but the devil is in the details. Most coverage gaps emerge around deductible increases (hail, wind), replacement cost versus ACV on roofs, liability limit reductions, or exclusion of specific endorsements (like wildfire or sewer backup). For example, 70% of CO carriers now cover older roofs at depreciated actual cash value, not full replacement, leaving homeowners short during hail season. Utah residents, especially in higher-wind or fire-risk corridors, face similar exclusions or higher-base deductibles in bundles.

If you’re not careful, a “savings” of $500 per year could lead to $5,000–$10,000 more in uncovered loss during a storm. Always require written documentation for all deductible types, ensure liability limits match your assets, and review whether specialty riders (like jewelry, business property, or wildfire) are included—or excluded—as part of the bundle offer.

Making the Right Decision for Colorado and Utah Residents

Question 1: Will your deducibles or coverage limits change in the bundle?

Many regional bundles quietly adjust deductible calculations—especially for wind, hail, or wildfire events. Ask your agent to break down:

• Which deductibles are now percentage-based instead of dollar-based (e.g., 1% of $350,000 home = $3,500 for hail)
• Are liability or property limits any lower than before?

Question 2: Does the bundled policy remove or alter key endorsements?

Some bundle offers omit or limit important protections like full replacement cost on roofs, sewer backup, or high-value personal item coverage. Review:

• Does your bundle include valuable-add riders needed for your home’s location (wildfire, flood, equipment breakdown in CO/UT)
• Will the bundle trigger new coverage exclusions (e.g., for home businesses, or if you drive rideshare)

Question 3: Will your bundle be future-proof as your regional risks change?

Colorado and Utah are facing more severe annual weather events and population shifts. Plan ahead by:

• Scheduling annual reviews of your coverage before hail/wildfire season
• Verifying that inflation and rebuilding costs are reflected in your coverage