Homeowners insurance seems simple until you realize most clients are underinsured and don't know it.
The classic problem: they bought the policy when they purchased the house, never updated it, and now the dwelling coverage is $100,000 below what it would cost to rebuild. One total loss and they're funding the gap themselves.
How I think about it
Dwelling coverage should reflect replacement cost, not market value. The house might be worth $400,000 on Zillow, but if it costs $350,000 to rebuild the structure, that's the number that matters for insurance.
Kerdora's calculator defaults to 80% of the property value as a starting point for dwelling coverage. That's a baseline. You'll want to adjust based on local construction costs, but it puts a number on the screen quickly so you can compare it to what they actually have.
What you're tracking
For each homeowners policy:
Property — links to a specific property in the client's assets
Dwelling coverage — the amount that covers rebuilding the structure
Dwelling deductible — what they pay out of pocket before coverage kicks in
Wind/hail deductible — some policies have a separate, higher deductible for wind and hail damage (common in coastal and storm-prone areas)
Personal property limit — coverage for belongings inside the home
Premium — how much they're paying and how often
The gap
The calculator compares dwelling coverage to the target (property value x target percentage). If they have $250,000 in dwelling coverage but the target says $320,000, that's a $70,000 gap.
But the numbers on the policy are only half the conversation. Deductibles matter too. A $5,000 deductible on a client who has $2,000 in their checking account is a problem. That connects back to liquidity.
Personal property limits are worth checking, especially for clients with expensive jewelry, art, or electronics. Standard policies cap personal property coverage, and most people don't realize it until they file a claim.