Pulling the Wrong Levers: Why "Cheaper" Connecticut Home Insurance Could Cost You a Fortune
- Dan Rossignol
- Dec 4
- 5 min read
For most of us, our home is more than just a place to sleep. It is the backdrop of our lives, the center of our families, and—perhaps most importantly—our single most valuable financial asset. Because it is such a significant asset, it requires a significant level of protection. Yet, when it comes to Homeowners Insurance, we often see a dangerous approach: treating the policy like a commodity. There is a misconception that a policy from Carrier A is identical to a policy from Carrier B, so the smartest move is to simply choose the cheapest one.
The reality? No two policies are the same.
In the insurance world, a "cheaper" premium rarely means the insurance company is just feeling generous. Usually, it means specific "levers" have been pulled to reduce the quality of your protection.
The "Levers" of Connecticut Home Insurance
At River East Insurance, we view an insurance policy like a control board with several adjustable levers. As agents, we can pull these up or down to customize a plan.
Lever 1: Premium (The Price)
Lever 2: Coverage Limits (The Payout)
Lever 3: Deductibles (Your Risk)
Lever 4: Endorsements (What Your Policy Covers)
These levers are interconnected. To pull the "Premium" lever down (saving you money monthly), you almost always have to pull the "Coverage" lever down with it, or push the "Deductible" lever up.
Over the past few years, as inflation has risen, we have seen many homeowners (and even some agents) aggressively pulling the levers designed to lower premiums. They strip down coverage to make the annual bill more tolerable.
But we have to ask the hard question: Is that short-term savings worth the long-term risk?
The Hidden Corners: What Gets Cut?
When you see a quote that is drastically cheaper than the others, it is usually because vital layers of protection—specific endorsements—have been stripped away.
Here are the specific "corners" that are often cut to lower a price, and exactly what that means for your wallet if you have a claim:
1. Water Backup & Sump Overflow
The Cut: This is frequently removed or lowered to a minimum limit (e.g., $5,000) to shave off premium. The Reality: This is not the same as flood insurance. It covers you if water backs up into your home through sewers or drains, or if your sump pump fails. The Risk: A finished basement with carpet, drywall, and furniture can easily suffer $20,000+ in damages from a sewage backup. If your limit is set to $5,000 (or $0) because the agent wanted to lower your quote, you are writing the check for the difference.
2. Service Line Coverage
The Cut: Many homeowners assume the pipes underground are the utility company's problem. They aren't. This endorsement is often skipped because it’s "optional." The Reality: You own the utility lines (water, sewer, gas, electric) that run from the street to your house. The Risk: Excavating a yard to replace a collapsed sewer line is expensive—often costing between $6,000 and $15,000. Without this endorsement (which usually costs pennies a day), that bill is 100% yours.
3. Equipment Breakdown
The Cut: Often dismissed as "unnecessary" or confused with a Home Warranty. The Reality: This covers the sudden mechanical or electrical breakdown of your furnace, A/C, water heater, or electrical panel. Standard policies only cover these items if they are destroyed by a fire; they don't cover them if they just stop working due to a mechanical failure. The Risk: If your central A/C compressor blows out in July, a standard policy pays $0. Equipment Breakdown coverage acts as a "mini-warranty" embedded in your policy to help cover replacement costs.
4. Extended Dwelling Replacement Cost
The Cut: A robust policy might offer 25%, 50%, 100%, or Guaranteed Replacement extended coverage; a stripped-down policy might offer 0%. The Reality: If your home is destroyed, it costs a certain amount to rebuild. But if a massive storm hits the area, material and labor costs skyrocket (demand surge). This coverage provides an extra "bucket" of money to account for that price spike. The Risk: If your home is insured for $400,000, but inflation and demand make the rebuild cost $500,000, a standard policy leaves you $100,000 short.
5. "Special Coverage C" (Personal Property)
The Cut: This is a technical lever that is easy to hide. A standard cheaper policy covers your stuff on a "Named Peril" basis (only specific events like fire or theft). The Reality: "Special Coverage C" (or Open Perils) covers your belongings for everything unless it is specifically excluded. It also typically covers mysterious disappearance and breakage. The Risk: If you accidentally spill paint on your expensive Persian rug, or drop a TV, a standard policy pays nothing. "Special Coverage C" ensures you are protected against life’s accidents.
6. Cyber Coverage
The Cut: A newer coverage that is rarely included unless specifically requested. The Reality: This protects you against the modern risks of the digital age: cyber-attacks, cyber-extortion, online fraud, and data breaches. The Risk: As our lives move increasingly online, the risk of funds being stolen or data being held for ransom is real. Traditional policies offer no help here.
The Math Doesn't Always Add Up
You might save $200 or $400 a year by choosing the policy that cuts these corners. That feels like a win in the short term. However, if that lower premium means you have a $20,000 gap in coverage when a pipe bursts, you haven't saved money—you've simply transferred the risk from the insurance company to your own bank account.
Consider the market we are in. Home values have increased drastically. If your policy was written to "save money" three years ago, and hasn't been updated, there is a high probability you are underinsured.
Sometimes, the "extra" few hundred dollars in annual premium translates to hundreds of thousands of dollars in better protection. That is an investment in protecting your net worth that is well worth making.
A Professional Approach to Protection
At River East Insurance, we don't believe in hiding the details. We want you to understand exactly which levers are being pulled on your policy. We are here to help you find the balance—providing a premium that fits your budget, but not at the expense of leaving your most valuable asset exposed to ruin.
Do you know what your current limits are? Do you know your current endorsements?
We offer a professional, no-pressure review of your current Connecticut home insurance policy—whether it is with us or another carrier. We will sit down with you to ensure you understand your coverage and that your assets are truly protected.
Dan Rossignol
Founder & Agency Principle
River East Insurance, LLC
860.615.9980
Contact River East Insurance today to schedule your review.
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