A groundbreaking analysis by ZestyAI reveals a critical issue in homeowners’ insurance coverage: millions of properties across the United States may be underinsured due to unreported or inadequately covered secondary structures.
Leveraging artificial intelligence and aerial imagery, ZestyAI analyzed one million residential properties nationwide and found that 45% include multiple structures such as detached garages, sheds, barns, or accessory dwelling units (ADUs). Many of these structures are either overlooked or improperly insured, posing a significant challenge for both homeowners and insurers.
Key Findings
- Structure Prevalence:
- 31% of homes have one additional structure.
- 11% have two additional structures.
- 4% have four or more secondary structures.
- Regional Trends:
- States with strong agricultural sectors, including Montana (59%) and Wyoming (58%), report the highest prevalence of multi-structure properties.
- Densely populated areas like California and Rhode Island show increasing numbers of ADUs due to evolving zoning laws.
- States like Georgia (26%) and North Carolina (29%) report the lowest prevalence of secondary structures.
According to ZestyAI’s founder and CEO, Attila Toth, “Understanding the full scope of a property’s structures is critical for accurate risk management by insurers. Our findings underscore the importance of advanced analytics to help insurers ensure comprehensive coverage while managing risk effectively.”
Why This Matters
Undeclared secondary structures leave homeowners vulnerable to financial losses in the event of damage, as standard policies often provide limited coverage for detached structures. For insurers, the lack of visibility can lead to unexpected claims and elevated risks.
AI-powered tools are helping address these gaps by providing real-time property assessments, eliminating the need for slower and often outdated traditional inspections. Beyond identifying secondary structures, advanced analytics also assess roof conditions and other critical factors to help insurers refine underwriting processes and reduce potential losses.
As secondary structures like ADUs continue to rise, particularly in urban areas with changing zoning laws, ensuring accurate property assessments and comprehensive insurance coverage has never been more vital.
For more insights from ZestyAI, visit www.zesty.ai.