Millions of Homeowners Risk Being Underinsured for Detached Structures

A recent analysis by ZestyAI, leveraging artificial intelligence and aerial imagery, uncovered that 45% of U.S. homes have multiple structures, many of which remain underinsured. These secondary structures, including detached garages, sheds, and barns, often go unreported, exposing both homeowners and insurers to financial risks.

States with significant agricultural activity, like Montana and Wyoming, have the highest prevalence of multi-structure properties, while more urbanized areas, such as California and Rhode Island, show growth due to zoning laws promoting Accessory Dwelling Units (ADUs). Conversely, states like Georgia and North Carolina report lower rates of such properties.

ZestyAI’s findings emphasize the critical need for insurers to adopt advanced analytics to manage risk effectively. Unreported secondary structures, if damaged, can lead to unexpected claims that surpass the limited coverage typically provided under standard residential policies. AI solutions streamline the risk assessment process, reducing reliance on outdated property records or slow physical inspections, while improving coverage accuracy.

The growing prevalence of multi-structure properties necessitates a proactive approach by insurers to ensure comprehensive coverage and mitigate financial exposure for both parties.