When Should I File a Home Insurance Claim?

Filing a home insurance claim can be confusing and frustrating, especially after an unnerving accident. Unfortunately, it is a process that most homeowners will go through at least once in their lifetime. It is important to know when it is appropriate to file a home insurance claim and what may happen when you do. 

You should generally file a home insurance claim after an accident if: 

Other People are Involved 

While most of home insurance is designed to protect the physical home and your belongings, a portion of home insurance also covers liability. General liability under home insurance covers injuries and property damage that someone may suffer on your property. For example, say a fire starts in your kitchen and destroys a visitor’s purse and everything inside. Home insurance can help cover repairs and medical bills someone else may face, as well as legal expenses you may be charged with after the accident. This is why most accidents involving other people, especially injuries, should generally be filed as a home insurance claim. 

Even if things seem fine at first, injuries can grow into more complicated medical issues and lawsuits. 

You Know the Damages are Covered 

This may seem like an obvious one, but many homeowners fall into the trap of thinking that their home insurance policy covers something it doesn’t. A basic home insurance policy won’t cover everything, and filing a claim for an uncovered peril is an easy way to get your claim denied. 

Incidents that are commonly excluded from home insurance policies include: 

• Flood damage 

• Earthquake damage 

• Criminal acts (committed by the insured) 

• Intentional damage or injury (committed by the insured) 

• Expensive items such as jewelry, furs and art 

Insurance providers do often offer endorsements and additional policy floaters in order to cover common exclusions or limitations. For example, you may be able to purchase a jewelry policy floater in order to upgrade the coverage available for your expensive jewelry. 

This will only be applicable if you already have the endorsements, however. Changing your home insurance policy while a claim is open will not affect the current claim. If you do not have a jewelry endorsement for the claim that is currently open, you cannot change your policy to have it covered. The endorsement will instead take effect for any incident after the open claim. 

The Costs Heavily Outweigh Your Deductible 

Your deductible is how much you pay out of pocket before receiving compensation. For example, say a storm sweeps in and causes $15,000 in damage to your home. Your home insurance deductible is $1,000. This means that you must pay $1,000 toward repairs before receiving compensation for the remaining $14,000. In this case, it would likely be worth it to file a claim since the difference between the damages and your deductible is so drastic. 

However, say a storm caused $1,100 in damage. With a $1,000 deductible, the difference may only be around $100. In this case, you may want to think twice about going through the process of filing a home insurance claim. 

This can also apply if you don’t reach your deductible. If a storm causes $600 in damage to your home with a $1,000 home insurance deductible, you cannot meet your deductible—meaning you would spend more money trying to file a claim than you would repairing the damage to your home directly. 

Before filing a claim, make sure to have any damage to your home appraised by a professional. They can quote you on the repairs, which gives you the idea of whether or not you reach your deductible. 

Unless the damages are substantially higher than your deductible, you may want to reconsider filing a claim. 

Why Should I Avoid Filing Home Insurance Claims? 

In some cases, filing a home insurance claim is absolutely necessary and there is no getting around it. However, most professionals urge caution when it comes to filing too many home insurance claims, especially in a short amount of time.  

Home insurance claims can raise your home insurance rates by a significant amount, especially if you file multiple within a short span of time. In some cases, insurers may even begin to view you as too high risk to insure. After your premiums go up, you could even have your policy cancelled as the insurer tries to avoid further loss. Having your policy cancelled can also make it hard to find affordable home insurance at other insurance providers. 

Be sure to have damage to your home appraised by a professional and speak with your insurance agent if you ever have a question about your coverage, claim or deductible.