A Kitchen Lesson that Had Nothing to Do with Cooking

I was in the middle of cooking maybe the best chicken thighs of my life in the kitchen. One thing you’ll learn as you get to know me is that I love learning and experimenting in the kitchen, and on this particular night, I was working on what I hoped would be my magnum opus of bone-in, skin-on chicken thighs in the skillet. There’s an art to everything, and that includes getting the perfect golden, crispy skin on a tender piece of poultry. I dried the thighs out in the fridge the night before, put them skin-side down on a cold cast iron pan, and was slowly bringing them up to a sizzle. I was Michelangelo, and this was my…. well, you get the point.

The dog was sleeping in the corner of the living room, our two-month-old was dozing off my wife’s arms, and the fireplace was roaring as I was admiring the stove.

And that’s when I heard the gurgle coming from the bathroom in my line of sight.

You see, when we bought this lovely house last summer, we were buying future memories and a place for our daughter to grow up. What we were also buying was a life-long stream of home-ownership griefs that come along with it…but that was really a secondary reason.

The downstairs toilet started overflowing in front of my eyes and the thought of my culinary masterpiece quickly disintegrated. I yelled a few choice words, cut the water off, and ran upstairs to grab towels, which set the dog to barking and the baby to a’ crying.

What we didn’t know when we moved into the house was the beautiful 30-ft tree in the front yard had sunk its roots deep into our main sewer line and had been busy slowly causing a back-up that manifested itself that very night.

My first call was to a plumber, and my second call was to our insurance agent about our coverage. Luckily, we had a service-line rider that covered damage to utilities outside the dwelling along with water backup coverage that would help pay for the damaged floors. While it was nice to have the coverage, it wasn’t enough to foot the bill and left us with some significant out-of-pocket costs.

While I was already familiar with homeowners, auto, and umbrella coverage, this event got me thinking a little bit deeper about how I should approach these types of policies. So naturally I went down a rabbit hole as deep as my recipe book to try and provide some insights for others.

Service line riders and water backup coverage

Most standard homeowners policies don’t cover what happens outside the physical structure of your home. That includes things like sewer lines, water lines, and other buried utilities that you don’t think about until something goes wrong.

A service line rider is designed to fill that gap. It helps cover the cost of repairing or replacing those lines if they’re damaged by things like tree roots, ground movement, or general wear and tear. Without it, you’re often on the hook for excavation, repairs, and restoration, which can add up quickly.

Water backup coverage typically covers damage caused by water backing up through sewers or drains, which is exactly what we experienced. It’s not automatically included in many policies, and the coverage limits can be lower than you’d expect, so it’s worth checking both whether you have it, and how much protection it actually provides.

Both of these features are relatively inexpensive for the amount of coverage you get. Food for thought – we had $10,000 of service line coverage (total cost of pipe repair was $17,000) and $15,000 of water back up coverage (which barely puts a dent on replacement floors).

Rebuild costs versus market value

One of the more common misconceptions we see is how people think about the value of their home in the context of insurance. Market value and rebuild cost are not the same thing.

Market value includes land, location, and demand. Rebuild cost is simply what it would take to reconstruct the home from the ground up at today’s labor and material prices.

If your coverage is based on an outdated estimate or tied too closely to market value, you can end up underinsured in a scenario where you need to rebuild. Construction costs have moved quite a bit over the past several years, and this is one of those areas that benefit from a periodic refresh. Most policies we review have coverage for rebuild costs that only extend to the market value of the house – that is a big gap for most people.

Cyber protection in a connected world

This is a newer category, but it’s becoming more relevant. Many homeowners policies now offer some form of cyber protection, either as an add-on or embedded feature.

This can include coverage for things like identity theft, online fraud, ransomware, or data breaches tied to your personal devices. As more of our financial lives move online, the risk isn’t just physical anymore. It’s digital, and in some cases, the financial impact can be just as disruptive.

Umbrella coverage and the bigger picture

Umbrella insurance is still one of the most straightforward ways to add an extra layer of protection across your entire financial life.

It sits on top of your home and auto policies and extends your liability coverage in situations where those underlying policies reach their limits. That can include major auto accidents, injuries that occur on your property, or lawsuits tied to personal liability.

It can also extend to things like defamation claims or certain rental property exposures, depending on how the policy is structured. The key point is that it protects against large, infrequent events that have the potential to create significant financial damage. Many of these events have legal implications that would require civil payouts or attorney’s fees that umbrella insurance has the ability to cover.

And while a car accident is an easy example, it’s not the only one. Liability shows up in a lot of everyday ways. A guest gets injured at your home. A dog bite leads to a lawsuit. A contractor is hurt on your property. Or a momentary decision behind the wheel creates long-term consequences. These aren’t unusual situations, just ones that carry outsized financial risk when they happen.

And relative to the level of coverage it provides, it’s often one of the more cost-efficient pieces of the puzzle.

A few auto coverage details that are easy to miss

Auto insurance is one of those areas where most people set it up once and don’t revisit it unless something changes. But there are a few details that are worth a second look.

Uninsured and underinsured motorist coverage is a big one. Not everyone on the road carries adequate insurance, and this coverage helps protect you if you’re involved in an accident with someone who doesn’t have enough to cover the damage.

Medical payments coverage can help with immediate expenses regardless of who’s at fault, which can be useful in bridging gaps before other insurance kicks in.

And if you have teenage drivers or multiple vehicles, it’s worth reviewing liability limits to make sure they reflect the increased risk that comes with those situations.