When individuals and families purchase homeowners insurance, they expect that it will help them pay for damages to their home in the event of fire, theft, vandalism, or another covered event. However, when that event occurs, the homeowner may find themselves debating on whether or not to file a claim because they do not want their premiums to increase.
The truth is that filing one claim probably won’t increase your premiums. However, it often depends on the circumstances surrounding the claim.
Understanding Insurance Claims
When your home incurs damage from a covered event, like high wind or a strong storm, you should call your insurance agent, tell them your house has experienced damage, and start the process of filing a claim. During the call, your insurance agent will ask several questions about how the damage occurred and the types of damage. Then, they will send out an insurance adjuster to look at the damage. They may even ask you to call a contractor or give you a list of contractors to call so that an accurate estimate can be obtained. Once the claim has been approved and the estimate has been created, they will subtract your deductible and mail you a check or pay the contractor if the contractor is working directly with the insurance company.
Making the Decision to File a Claim
While filing an insurance claim is fairly easy, making the decision to file a claim can be difficult. Thankfully, there are a few questions you can answer to make the process simpler.
Is the damage higher than my homeowner’s insurance deductible?
Many homeowners insurance policies have deductibles that are at least $1,000. Read your policy to determine your deductible amount. Depending on the amount of damage, you may know instinctively that the deductible is lower than the repair or replacement costs. However, if the damage is less than your deductible amount or slightly higher, you may not want to file a claim. For example, let’s say that your home was burglarized. The intruders damaged the front door and stole your TV. The total cost of fixing your front door and replacing your TV is $800, and your deductible is $1,000. In this scenario, your deductible is higher than the amount of damage, so filing a claim wouldn’t result in any money for the repairs to your front door and the replacement of your TV. However, it would result in the filed claim being on your insurance records.
Can you afford to make the repairs or replace the items from your own finances?
Once you have the estimate for the repairs or to replace the items that were damaged or stolen, determine the potential amount of the payout by subtracting the costs from your deductible. Can you afford to make the repairs or replace the items without insurance money? Another question to ask yourself is if the payout is worth filing the claim. If it’s only a few hundred dollars and/or you can cover the costs from your own finances, you may want to choose that option rather than file a claim that would result in a small payout and a filed claim on your insurance records.
How many homeowners insurance claims have you filed in the last few years?
In a lot of instances, determining whether or not to raise your rates depends on the number of claims you’ve filed within the last few years. If you’ve filed several claims, there’s a good chance that filing an additional claim will result in increases to your premium. This is because the insurance company now considers you at a higher risk for filing additional claims in the future.
Not All Claims Are Considered Equal
It’s important to note that all claims are not considered equal. If someone gets hurt on your property, like slipping and falling, or gets bitten by your pet, these are weighted more heavily than other types of claims. This is because your insurance company may think you’re being careless by not putting your dog up prior to visitors arriving or having large puddles of water on the floor of your home.
Another potential issue is a claim that is the result of theft. While the theft is certainly not the homeowner’s fault, it may cause your insurance carrier to look at the crime rates of your neighborhood. If they determine that the crime rates have gone up, you may see a rate hike due to the increased risk of more burglaries in the area. Additionally, your homeowner’s rates may increase if your area is prone to severe weather or if your home has a history of frequent insurance claims.
Filing Homeowners Insurance Claims with Fearnow
If you’re unsure about whether or not you should file a claim or if a claim might increase your premiums, you can talk to our insurance agents. Our agents will listen to your potential claim and answer your questions. We can also look up your deductible amount and give you all the pros and cons of filing your claim. If you decide to file a claim, you can start the process over the phone.
To learn more about homeowners insurance and the claims filing process, give us a call at (813) 689-8878.