When I first started in this business, it was very common to file home insurance every time something happened. This was also the time of the $100 deductible, looser underwriting and no claims surcharges. However, it is no longer a good idea to file a complaint every time you notice something is wrong. I have listed the top 5 reasons below.
When your claim is less than your deductible
So you have a $1,000 deductible on your home insurance. A wind comes and blows away a handful of shingles. Unless these shingles cost more than $1000, you have no claim. So there is no reason to submit it.
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7;s say you turn too fast into your garage and rip off a wing mirror. This would be considered a collision claim and let’s say your deductible is $500. Again, unless the damage is over $500 you have no claim.So how do you know the cost to repair? Get an estimate. If you don’t know how much it will cost, you have no idea if you have a claim or not. We regularly recommend this approach and then customers can make an informed decision whether or not to file a complaint.
And another piece of advice from someone who has been in insurance for a long time……. even if your cost to fix is above the deductible, how much above the deductible also matters. $1000 deductible and the cost to fix the shingles is $1500? This means you pay the first $1000 and the insurance company pays $500. It might not be worth submitting it. Mirror costs $550? Maybe just want to pay out of pocket. Because…
The insurance companies now apply damage supplements
So a common tactic that insurance companies now use on home insurance is to apply a damage allowance. This can be applied for the FIRST claim and also for a submitted claim with ZERO payout. So it’s really not a good idea to just file one claim after another, because even zero payout claims can count against you.
And the surcharge can stay on the insurance for several years. In other words, save the insurance for the big stuff.
The damage is from normal wear and tear or not sudden and accidental
Homeowners insurance does NOT cover normal wear and tear. It is for sudden and accidental events. For example, the hailstorm that is coming. Or a windstorm, tornado or other sudden weather event (excluding flood, as it is covered by a flood policy). Or god forbid, a fire. There are many other examples of course, but the sudden & accidental language is super important here.
Let’s say you notice mold growing on your bathroom wall. Mold does not appear overnight (not suddenly and accidentally). It is a sign of an ongoing moisture problem that has taken time to develop.
Or maybe your roof is old, showing signs of wear and needs replacing, but you just keep putting it off. A heavy rain comes and water comes in through the roof. The claim could easily be dismissed as the worn roof is what caused the water to seep through.
And since roofs are such a popular source of dissatisfaction, here’s a helpful article to help explain why.
Home insurance specifically covers sudden and accidental damage to your home. If the damage is caused by negligence, the insurer considers the homeowner to be responsible.
You have filed other claims in recent years
Too many claims in too short a time is a big red flag for home insurance companies. And the next steps they can take include the additions mentioned earlier, higher deductibles, removal of coverage or cancellation.
Because it affects your ability to get home insurance in the future
Let’s say you want to look for home insurance. Previous Claims (Paid and Unpaid) MEANINGS. Even 2 in the last 3 years can make a company say “No – can’t help you.” So a bunch of submitted claims will affect your insurability in the future.
So how do I know when to file a home insurance claim?
Your insurance agent is your BEST resource. Don’t have an agent but bought directly from the insurance company? You can definitely call and see if they can advise you. However, as an insurance agent, we can discuss the situation with you, help determine if it is a covered claim (if we have the ability) and discuss the possible consequences of filing the claim. Sometimes we cannot determine whether it is covered or not, due to the complexity or nature of the claim. In those situations, we have no choice but to submit and let the carrier investigate. But at least we can have a discussion and help you make an informed decision.
Here is an article that may also be helpful – Top 4 Reasons to File an Insurance Claim.
