To protect your home against financial loss due to property damage, theft, or liability claims, having the right homeowners insurance policy is a must. Unfortunately, knowing when an incident warrants filing a claim isn’t always black and white, and the process can differ due to individual values, needs, and expectations from an insurance policy. Here are a few guidelines professionals use as criteria to know when it’s time to file a claim.
Losses that exceed a certain amount
The concept of filing any claim that would exceed deductible costs is controversial and divisive, and it comes down to personal preference. Some homeowners will automatically file a claim for any damage that will exceed their deductible, no matter how small the amount. Others say it’s not worth documenting the incident in their claims history or running the risk of the insurance company raising their premium.
It’s up to the homeowner to make an informed decision about their baseline for filing a claim. Before any incidents occur, determine how much money you’d be willing to pay out of pocket for various home mishaps and how much money after deductible costs justifies going through insurance.
Any incident that could become a liability claim
Any incident that could turn into a liability claim should be reported to your insurance company promptly. The insurance contract typically dictates that the policyholder must report liability incidents, such as injuries, as soon as possible. Even if the claim seems relatively minor, it’s best to go ahead and file. Reporting an incident early gives your insurance company the best possible chance at defending you.
For example, let’s say your kids have a sports match with their friends in the backyard and someone gets injured. The insurance company will thank you for reporting the incident, even if the case gets dropped after they contact the other child’s parents. There’s always a chance an injury could be worse than it appears at first glance, and if surgery is required, there’s a higher chance insurance will have to pay.
Property damage that seems minor but has a risk of being worse than it appears
Sometimes, property damage can seem inexpensive and easy to fix at first glance, but upon deeper investigation, turns out to be much worse. Water leaks are a prime example. It’s easy to evaluate surface-level damage, but until a professional inspection has been done, it’s impossible to know the full extent or the cost of repairs.
Any property damage that can’t be fully assessed immediately should be filed as a claim. It’s ultimately better for both the integrity of your home and your finances to have a professional evaluation done.
Costly damage that you can’t cover entirely by yourself
One of the more obvious reasons to file a claim is in the event of a major incident that will require financial assistance from the insurance company. For example, if a bad storm causes a large tree to fall on your property, your insurance company can assist you with the fees for both the tree removal and the damage caused to your property. Filing a claim for larger incidents also gives you the advantage of the insurance company arranging a professional evaluation to determine the extent of the damage.
How to file a claim
If you decide to file a homeowners insurance claim, start by contacting your insurance agent. Your agent will be able to give you an overview of the insurance company’s process, soothe any fears you may have, and answer your questions. They will also provide you with an estimated timeline for each step of the process.
After you’ve spoken with your agent, wait for your insurance company to reach out to you. They’ll talk you through everything required on your part and update you on the progress on their end, too. The insurance company may have to investigate the claim you file, which could include getting statements from a third party or conducting a damage appraisal.
Be patient during the process. Some claims can take a year or more to be fully resolved. In the meantime, keep your agent in the loop with any updates along the way.
Paul Martin, CPCU, is an insurance professional for Trusted Choice with over 30 years’ experience in the field. Throughout his career, his mission has been to advance the insurance industry through education to be better equipped to serve the public.