Insurance Advisor at Oliver L.E. Soden Agency, Inc

When and When Not to File a Homeowners Claim

In an ideal world, you would file a claim through your insurance every time your car or home was damaged. However, filing a claim on certain damages can cause your rates to increase. Additionally, insurance companies can deny certain claims or even choose not to renew your policy. Knowing when and when not to make a claim is important.  


On average, homeowners file a claim once every 10 years. The most common types of claims are dog bites, fire damage, water damage and personal injury. Since the average homeowner files a claim once in a decade, insurance companies aren’t always comfortable insuring people who file more than this.


To ensure that you have a positive experience with your homeowners insurance, here are some tips to keep in mind.


Don’t Claim the Small Stuff


Small damages should not be claimed on your insurance, especially if the damage is around the same cost as your deductible. It’s much better to pay for the repairs out of pocket and save your insurance for a rainy day. If the damages do cost more than your deductible, consider how much the payout will be. Again, if it’s not a lot, it’s probably best not to report the damage.  


Assess What Caused the Damage


Some accidents are completely random - a tree falling on a house, for example - but others are tied to maintenance issues in the home. If you have a rotting fence that is damaged in a storm, it’s possible for it not to be covered. Insurance companies like to see their policyholders maintain their homes. This avoids senseless claims from being filed and leads to lower rates.


Determine if the Damages are Covered


If you’re not sure if you should file a claim, review your homeowners policy to determine what’s covered. If you make a claim for something that isn’t covered on your insurance, you’ll get a firm “no” from the insurance company, and the claim request may be added to your record. You can always call your agent for more information, but be sure to let them know that you are simply asking questions.


Know that Claims are Tracked


If you do decide to file a claim through your insurance company, be aware that insurers track them in national databases called CLUE and A-PLUS. These databases track information such as the date of the loss, the type of loss and how much the insurer paid out. The purpose of this is to prevent people from jumping around from one insurer to the next to get lower rates.


Your insurance is available for you to use, so you can technically file a claim whenever you feel it’s needed. However, understand that you can be penalized for making too many claims in a certain number of years. Talking with your agent can provide clarity on this issue and how to best handle your circumstances.