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Video — When Should You Make Home Insurance Claims?

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Home insurance claims are best made for significant damage or events with costs greater than your deductible. If your deductible covers the majority of costs, paying out of pocket may save you money. Compared with rate increases caused by added claims. A history of filing claims is not in your favor. If you file too many, your home insurance company could choose to drop your coverage entirely. Of course, claims should be related to covered damage in some areas. For example, flood and earthquake insurance are carried separately from normal home insurance. You'll have to file through the specific related policy for these types of damage. Remember, home insurance does not exist to cover ordinary maintenance. A claim to fix ordinary wear and tear, or something that could have been prevented by regular upkeep may not be covered. Finally, only make a claim when you have document. Everything. Do a walkthrough, take notes and photos, and list everything damaged by an event to ensure that you and the insurance adjuster are addressing the full set of issues in the claim.

In-Depth: When Should You Make A Claim?

When should you make a claim on your home insurance?

With both homeowners insurance and car insurance, it's important to think about when to file a claim and when not to, as well as how doing so might affect your premium and your pocketbook in the long run. Never assume that your homeowner's insurance will cover what you think it will. Find out more about what home insurance covers by reading our guide.

Claims you make on your home insurance stay on your Comprehensive Loss Underwriting Exchange (CLUE) report for up to seven years. This helps insurance companies figure out how likely it is that you will make another claim. If you get too many tickets, your insurance company can cancel your policy if they think you and your home are too risky. You may also be surprised to see your premium go up after filing a claim, even if the claim was caused by an unexpected or accidental event, which is exactly what home insurance is supposed to protect you from.

Even if you pay for home insurance, your insurer is not required to help pay for repairs whenever you need them. If you know when not to file a claim, you won't have to deal with headaches, higher premiums, or a policy that doesn't renew on its own.

When you shouldn't make a claim on your home insurance

Know how claims on your record will affect the cost of your homeowners insurance, and you'll be glad you didn't file a claim that wasn't necessary. Here are some times when you shouldn't call your insurance company.

1. The cost of fixing or replacing doesn't go over your deductible.

The same rule applies to deciding whether or not to file a claim on your home insurance as it does to your car insurance: if your deductible is less than how much it would cost to fix the damage, it makes more sense to pay for it yourself rather than risk having your premium go up. Don't worry about small things, and don't call your insurance company for small fixes.

2: It needs to be fixed or it's just normal wear and tear.

If you could have done something to prevent the damage, your insurance probably won't pay for it. Homeowners are responsible for basic upkeep and maintenance, so your insurance company won't pay for wear and tear, even if your home is completely destroyed by a covered loss. If you haven't taken care of your roof or fence for years and it falls down after a heavy snowfall, the insurance company won't pay out because you could have stopped it if you had kept up with maintenance.

3: You've filed a claim in the last three years

When insurance companies look at your claims history, they get nervous if you've filed more than one claim in the last few years, even if it wasn't paid out and was denied or unresolved. If you file a claim after already having a few, your policy may not be renewed or may be canceled, and you may have trouble getting coverage elsewhere.

When you should make a claim on your home insurance

So, what should you do with your home insurance? As a general rule, you will have bigger losses after a risk that hurts your property.

The cost to fix or replace something is more than your deductible.

When bad things happen, part of your roof falls in. It will cost $5,000 to fix, and your deductible is $1,000. To get it fixed, it would be smart and worth it to file a claim with your homeowners insurance company. If the damage to your home was caused by a covered loss and will cost a lot to fix or replace, it makes more sense to ask your insurance company for help.

There's a lot of damage or it's a total loss.

This is where homeowners insurance is most useful: when an unexpected event causes so much damage to your home that it can no longer be lived in. In these situations, you should file a claim to get your money back.

It's the first claim you've made in three years.

As we've already said, insurers look at your past claims when they decide how much to charge you for your premium or if they should cover you at all. Statistically, if you've filed a claim before, whether for your home or your car, you're more likely to file more claims in the future. Even if you pay your monthly premium, insurance companies don't want to be responsible for that risk. When you do need to file a claim, try to do it as far apart as you can.

How to make a claim on your home insurance

People who need to make a claim on their homeowners insurance may be interested in how the system works. Here are the steps you need to take to file a standard claim. Keep in mind, though, that your situation could make the way you file a claim a little different.

1: Get in touch with your insurance company

The first step in making a claim is to tell your insurance company about it. If your claim is related to a crime, like theft or vandalism, you'll need to call the police first. At this point, your home insurance company will probably tell you if the claim is covered and how long you have to file it. They can also tell you how long the claim might take to process and whether or not it will cost more than your deductible.

2: Fill out the right forms to make a claim.

Once you've talked to your insurance company about the claim, they'll send you forms to fill out with information about the damage. Fill out as completely as you can any claim forms your insurance company sends you. Also, make sure to send them back quickly so the claims process can keep going.

3: Have a person from your insurance company look at the damage.

Most of the time, the next step is for a claims adjuster to look at the damage and offer a sum to help pay for repairs. Make sure you're ready for them to come by having any receipts or other information they might need ready. Most likely, they will talk to you about what happened and how bad it was.

4: Fix things temporarily

It's important to stop more damage from happening until enough can be done to fix it. By putting tarps over a damaged roof or boarding up broken windows, you can keep the damage from getting worse, which would make it more expensive to fix.

5: Make a list of the damaged things.

The better your inventory is, the more detailed you can make it. The value of your items, model numbers, and the dates you bought them can be very helpful. Try to include receipts when you can to make things even easier.

6: Get repair estimates.

Getting an estimate for repairs from a local contractor or appraiser can help you make sure that your insurance company is giving you enough money to do the work.

7: Fix things

If you have a mortgage lender, they may have a say in how your home repairs are done. This means that if you want to save money, you might not be able to do it yourself. In fact, it's likely that the name of your bank or lending agency will be on the check you get from your insurance company. This is because they have an insurable interest in the property and want to make sure it stays in good shape. Depending on how much property damage coverage you have, you will get money for your personal property at either the cost to replace it or its actual cash value.

8: Keep track of any extra costs of living

If you can't live in your house while repairs are being made, the "additional living expenses" part of your homeowner's insurance will pay for things like a place to stay, food, and transportation. Keep track of your expenses so you can get paid back the right amount.

Reasons why homeowners' claims are often turned down

A trained claims adjuster will look into any claim you make to make sure it is true. But it shouldn't be a surprise unless the company has a bad reputation for how it handles claims. Let's go over the main reasons why your homeowners claim might be turned down.

1: The damage was caused by a risk that wasn't covered.

If the peril (what caused the loss) is not covered, like flood damage, your insurance company will not pay out on your claim. If a hurricane causes your basement to flood, you won't have any homeowners insurance coverage because floods are not covered by any policy. For this claim to be paid, you would need FEMA flood insurance. If you buy their coverage add-ons, you might be covered for other types of loss, like mold or water backup. Any change to your policy is called an endorsement. In this case, you would have to buy a mold or water backup endorsement for your policy in order for your claim to be paid.

2: If the damage was planned or could have been avoided

If you do something bad, your insurance won't cover it. Any damage you did on purpose to your home won't be paid for. When you file a claim, trained claims adjusters will look into how the loss happened. This means that you should think carefully before filing a claim for damage that was done on purpose. Also, insurance won't help if the damage was caused by carelessness or could have been avoided.

3: If the damage was caused by normal wear and tear or problems with maintenance,

Homeowners insurance is meant to cover damage that happens quickly and out of the blue. If your basement had a slow leak and mold grew because of it, your insurance won't cover it. Old roofs, floors, and siding are all in the same boat. Any maintenance or wear-and-tear losses are the homeowner's responsibility or are covered by a warranty.

4: If your policy was cancelled or not in effect when a claim was made,

This one is pretty easy to figure out. If your policy was canceled on January 1 and you try to file a claim for damage that happened on January 10, your claim will be turned down. Even if you renew your policy, your insurance company is very unlikely to pay your claim. Our best advice is to always pay your insurance bill! If you're getting a new policy from a different company, don't go without coverage for any days.

5: If you didn't act fast enough,

How long you have to file a claim depends on your company and your state. If you wait too long, your claim could be turned down.

6: If the damage doesn't cost more than your deductible,

Before you call your insurance company, get a rough estimate of how much the damage will cost. Even if you get nothing from the claim, it can still affect your premium.

How much does the price of home insurance go up after a claim?

Every insurance company has its own way of figuring this out. The cost and size of the damage, as well as who you have your property insured with, will all affect how much extra premium you'll have to pay after filing a claim. You can get a rough idea of average rates and rate increases by type of claim from the table below.

There are four main things that cause rates to go up after a claim.

  • Claim type: Some dangers and losses can do more damage than others.
  • Claim payout: You can expect your insurance company to charge you more in the future if you make a claim that costs a lot. How much you get from your claim depends on how bad the damage was.
  • Where you live changes how much your home insurance costs. If there have been a lot of losses in your neighborhood in the past, insurance companies can use that as a sign that you might need to file a claim in the future.
  • History of claims: Your personal history of making claims can be used to figure out how much your rate should go up. Your history of making claims can be used against you to charge you a higher premium.


What to think about when filing a claim as a homeowner

How much your home insurance premium will go up after you file a claim depends on where you live, what caused the claim, how often you have filed claims in the past, and how much the claim payout cost the insurance company. Theft, fire, and liability claims tend to have the most effect on premiums. If you file one of these claims, you can expect your premium to go up by at least 20%.

When deciding whether or not to file a home insurance claim, you should think about whether or not the extra cost will be worth it in the long run. You should also think about what could happen to your insurance coverage if you file a claim. You don't want to find yourself in a situation where a disaster has done a lot of damage to your home but you can't get insurance because you've already filed too many claims. If you know when to file a claim and when not to, you'll save more money and keep a better relationship with your insurance company for when you really need it.

If you've already filed a claim and your insurance costs are higher than the averages shown above, this is a good time to compare quotes and find a new policy. You can also look for lists of the best companies that offer cheap home insurance.


Author
Nichole Robertson
Lead Editor
January 27, 2023
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