What is Insurance Readiness Score?
A homeowners insurance readiness scorecard evaluates your coverage across dwelling, personal property, liability, and emergency provisions.
The Formula
Score = (Points Earned ÷ Maximum Points) × 100
Worked Example
A homeowner: dwelling cover 9/10, personal property 6/10, liability 7/10, emergency 4/10.
- Total = 9 + 6 + 7 + 4 = 26
- Maximum = 40
- Score = (26 ÷ 40) × 100 = 65%
📌 Readiness is 65%, dwelling cover is strong but personal property underinsurance and lack of emergency cover are risks.
Why This Matters
Financial protection
40% of US homeowners are underinsured. Adequate coverage prevents financial devastation from fire, flood, or theft.
Mortgage compliance
Most mortgage lenders require adequate homeowners insurance. Non-compliance can trigger loan default.
Claims success
Well-documented, adequately covered policies pay out 90%+ of claims. Underinsured policies lead to partial payouts.
Common Mistakes
❌ Undervaluing personal property
Most people underestimate contents value by 30-50%. Room-by-room inventory reveals the true replacement cost.
❌ Not updating replacement cost
Replacement cost is not market value. It changes with construction costs. Update your estimate annually.
❌ Skipping accidental damage
Standard policies exclude accidental damage. With children or pets, this cover is essential and costs only $30-60 extra.
Industry Benchmarks
| Category | Good | Average | Poor |
|---|---|---|---|
| Dwelling Cover | Full replacement cost | Estimated value | Below market value |
| Personal Property Cover | Full replacement | Partial (50-75%) | Below 50% |
| Policy Review | Annual review | Every 2-3 years | Never reviewed |
Source: III Homeowners Insurance Guide 2025
Benchmark data sourced from III Homeowners Insurance Guide 2025.