I recently spoke with a home insurance agent who mentioned that the term “total finished living area” does not include finished basements or below-grade finished spaces. I received a quote for new home insurance that was lower than expected, but it seems that the square footage used for this quote only accounts for the gross living area and omits about 1800 square feet of finished basement and in-law suite that are partially below grade. When I reached out to the agent for clarification, he assured me that the finished basement was indeed noted in the policy. However, after doing some research, I found that “total finished living area” is typically considered different from gross living area. I’m concerned about the potential risk of being underinsured, so I want to ensure I’m fully covered.
Home insurance salesperson saying “total finished living area” does not include finished basement or below-grade finished rooms?
It sounds like you’re doing your due diligence, which is great! The terminology around home insurance can indeed be confusing. “Total finished living area” often refers to the above-grade living spaces, while “gross living area” (GLA) typically includes all finished areas in the home, whether above or below grade.
It’s important to clarify a few things:
Policy Details: If the agent mentioned that the finished basement and in-law suite are specifically noted in the policy, that is a good sign. You want to ensure that those areas are explicitly covered.
Insurance Requirements: Different insurers may have varying definitions of what constitutes total finished living area, so it’s essential that the terms used in your policy align with common industry standards in your area.
Underinsurance Risk: If you believe that your home’s total value (including all finished areas) is not accurately reflected in the policy, it could lead to underinsurance. You should verify that the replacement cost and coverage limits take into account all finished areas.
Get it in Writing: Consider requesting a written confirmation or a copy of the policy details that clearly outline how the finished basement and in-law suite are treated. This can provide you with reassurance and clarity.
Seek a Second Opinion: If you’re still uncomfortable, you might want to consult another insurance agent or company. They can provide a second opinion and establish whether your current coverage meets your needs.
Ultimately, it’s crucial to ensure that your policy adequately covers your home’s total value to prevent any potential coverage gaps in case of a loss. Don’t hesitate to ask your current agent for further clarification if needed!