What are the reasons for not claiming homeowners? Catalog
Homeowners insurance companies keep and share with other insurance companies, a record of all claims you have filed for up to seven years. If you submit one too many claims, you can be considered a high risk and the insurance company can cancel your insurance. Even if your insurance is not canceled, you can expect an increase in your premiums after you have submitted a claim. In some states, a single home insurance application can increase your premiums by 20% per year. In most cases, it is more cost effective to pay for less covered losses out of your own pocket.
When should you claim your home insurance? Catalog
Homeowners' insurance is designed to protect you from loss, and there are cases where it makes sense to apply financially. If your home is so badly damaged by an unexpected, covered disaster that it is uninhabitable, it's time to claim. You can also consider reporting if the cost of repairing the damage to your home exceeds your deductible. There is less risk of your insurance being canceled if you have not made a claim in the last three years.
When should you not claim a homeowner?
Every claim you register is registered on your long-term record, regardless of whether the insurance company pays out or not. If the cost of repairs is less than or just slightly higher than your deductible, it may make more sense to simply pay out of pocket to cover the damage. It is not wise to involve your insurance company in minor repairs.
Even if the repair costs are significantly higher than your deductible, you should be sure that the damage is covered by your insurance before you make a claim. The insurance company will probably not cover it if there was anything you could have done in the form of regular maintenance to prevent the damage. For example, if your roof was in need of repairs and collapsed after a heavy snowfall, your insurance company will likely deny your claim for a new roof.
If you have filed a claim in the last three years, whether it was denied or not, you should think carefully before submitting a new claim. If you do, you risk that your insurance will be canceled or renewed and that you will not easily be able to get coverage elsewhere. If you are unsure whether to apply for home insurance, our friendly agent can help.